these benefits in Q2, that's what we've seen. So I would say, if at all, that would have been visible in Q2, so it's largely behind us. As you relate to the new tariffs, particularly the 301 tariffs, I don't expect a major change in the tariff environment around us. I'll put it differently, but the tariff expenses or costs which we have in Q2, we expect similar levels in Q3 and Q4, plus minus.

Your next question comes from a line of Edward Maggi from BNP Paribas. Your line is open.

Hey, good morning, guys. Thanks for taking my questions. So the first one, you held MDA Lat M margin steady for the guide, and my math would suggest that you might need to post second-half margins potentially as high as 8% plus.

So it would be helpful to hear about how you're viewing the sequential uplift from Q2 to Q3, and then for Q3 to Q4 as well, given the promotional environment you're seeing there. yeah and then and again we typically don't give q3 or q4 specific margin guidance but i think you participate with two big elements you have in the back half first of all as a very important reminder our kitchen aid sda business is a very seasonal business so there's a lot coming q3 and q4 so by definition um and that has not changed um we're basically having a step up um overall between q1 and q2 versus the second half and kitchen aid sda profitability the other element is north america um as i pointed out earlier between q1 q2 we had very sizable step up on the

margin on the back of pricing and we see and we do expect similar improvement in q3 and q4 north america based on pricing and the additional cost actions if i may add i think the question is also directed at lar so we're taking pricing pretty significantly in uh in brazil right now which is really where we um are turning the the tide from the margin standpoint the rest of the continent is actually been performing really well. So in Brazil specifically, we're taking pricing and we're doing that on the back of really strong brands and really strong new product introductions that happened earlier this year and that are continuing to roll through Q3 and the earlier part of Q4. So a little bit similar to the conversation for North America, you'll see pricing take hold progressively as we move through the quarter. It's already effective from a direct-to-consumer standpoint, but it was announced to be effective August 1st from a retail perspective. So it's going to take a little bit of time to kind of seed through the quarter in Q3 and then expand fully into Q4. And then on the cost side, also a bit of a progression sequentially from Q2 to Q3 to Q4 as we take fixed cost and variable cost out of the overall P&L.

Thanks, Ludwin. Sorry, Ed, for misunderstanding your question. I thought you referred to the overall company as opposed to Latin America.

No worries. Color on both segments is helpful either way. So I appreciate that. And then, yeah, just as a brief follow-up, I'm curious if you could quantify the amount from the Brazilian tax tailwind in the quarter. I'm not sure if I had missed that on the call or anywhere else.

So, hi. Hi. This is Roxanne. In terms of the Brazil tax, we did get a meaningful benefit as it relates to the tax, which we have mentioned both in the presentation as well as on the script. I would say the net impact is roughly $14 million. We had some puts and takes, but overall net would be around $14 million.

Your next question comes from the line of Jeffrey Stevenson from Loop Capital. Your line is open.

Hi, thanks for taking my questions today. It's been several months since the changes in Section 232 valuation, and, you know, wondered if the steady improvement in competitive pricing and a challenging residential backdrop up through July, gives you confidence that the industry has, you know, become more rational from a pricing and promotional standpoint moving forward?

Yeah, Jeffrey, it's Mark. So first of all, you're correct, but $232 is now kind of the final change of $232 is now a couple of months in the market. So as such, we've seen stabilization. It's a very important thing, however, to note also what we did in the pricing is not just tariff related. It's also related to inflation, which we're facing and we have been facing over the last two or three years. So it's a compound effect on tariff and the basic inflation costs. I think what we're seeing right now is people pass on the real costs of the products to the market. And, you know, that's what we're doing. We have a real cost and we pass it on to the market. If you call that rational environment, yes, that's what it is. And I would also expect, keep us in mind that the cost for tariff for us are lower on a relative basis than for our competitors. So put it differently, our competitors will feel the impact of tariff significantly more than we do. But I, you know, I can only speculate about that pricing and that's their job to do. But I would say overall as an industry, in the long term, people are expected to reflect cost in the product pricing.

Understood. Thanks, Mark. And then Keith discussed the decision to consolidate regional distribution centers and return centers and, you know, what factors were considered in the, you know, 25% reduction that will be closed or consolidated. And then, you know, on top of that, you know, how we should think about the timing of the expected $60 million in annualized EBIT benefit.

Yeah, Jeffrey. I mean, first of all, and this may be more for a broader audience, essentially as a company, you have three types of distribution centers. You have a factory distribution center. you have this big regional distribution center and then you have a local distribution center i would say by definition we probably have the tightest net of local distribution center of anybody in the industry um and what you do when you make these local distribution decisions you basically um on one hand you want to be close to the customer in a physical distance but what you also got to recognize um the more distribution centers you have you basically spread your inventory pretty thin which doesn't help on availability so we're kind of dialing back in terms of still being very close physically to the customer as you have before 97 of our customers are within 100 miles but with a reduction of a distribution center actually will help us our availability and at the same time obviously it will help the operating costs from local distribution centers so actually that's what they call it a rebalancing we still have a super super well covered local distribution center but i think the outcome will be lower cost and better availability see i think that was the last question which we had on call so first of all i want to thank you all um for participating in today's call again as a reminder hopefully you heard that today we actually feel pretty good about where we are for q2 we had more incremental margin improvement between q1 and q2 our pricing work in particular in north america sticks we announced additional pricing also in latin america we talked a lot about new products and we feel very good about the new products but we all recognize we still have a step up in front of us for Q3 and Q4. But hopefully you heard today, we feel kind of encouraged by what we're seeing in Q2 and we will continue on the path of incremental margin improvement. So thank you all for joining us and have a wonderful day.

Ladies and gentlemen, that concludes today's conference call. You may now disconnect.