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Operator

Filippo Falorni with Citi.

Filippo Falorni

Sue, maybe just following up on Rob's question. Just on the Prestige fragrance category, you mentioned you still grew at mid-single-digit rate if you adjust for the Easter timing, low single-digit more on a reported basis. Can you give us a sense of just geographically, how you're seeing the growth of the category, especially exiting the quarter, if you think this mid-single digit is sustainable going forward?

Sue Nabi

Yes, Filippo. So we believe this mid-single-digit percentage growth is sustaining for -- specifically in the US It's also strong in most European markets. And the reason why we believe this is going to continue or sustain is that this famous fragrance index that we've been referring to since now almost three years is continuing in a way to play with the steel and this is what we envision for the next years, still gains of penetration in a country like the US where penetration is still much lower driven by a new generation of users. It used to be Gen Zs. It used to be male consumers, Hispanic consumers. This continues to a lesser extent, but now it's around male teams, and still a continuation of Gen Z trending towards niche fragrances.
So we believe this, I would say, growth engine for this category will continue in the US In Europe, the growth probably in the coming years will be driven by mix and pricing. And in China, if this market, which we see starting to get a little bit better quarter after quarter.
But there again, the penetration level is also so low that we believe the volumes are coming from more and more users will continue to drive the growth of this market. So to answer the question, the market is strong in most European markets. It continues to be mid-single digits in the US It's today still affected in China, but we believe that all in all, the global growth of the category of fragrances, both in Prestige and mass will continue to be the strongest among the three key categories of the beauty business.

Operator

Susan Anderson from Canaccord Genuity Corp.

Susan Anderson

I wanted to ask about the Consumer Beauty business. I think in your prepared you talked about rebalancing our resources to profit. Not sure if you meant just within Consumer Beauty or the whole portfolio, but just curious how you're thinking about CoverGirl. And if potentially you could sell that at some point? Or do you want to refurbish your efforts here towards profitability and then some more consumer innovations, I believe you mentioned.
And then also if you could just talk about the promotional environment in mass cosmetics, given it's been one of the weaker areas of beauty. And then I was curious how some of the international brands like Rimmel has performed versus CoverGirl?

Sue Nabi

Thank you. So if I understand what your question, it's about how to increase the profitability of the Consumer Beauty division. So Consumer Beauty division is two stories, if I may say. There is color cosmetics on one side and then massive fragrances on the other side. The first information that needs to be known is that it's -- we see really diverging trends, with color cosmetics under pressure, we know the declines of this market, both globally and in the US But what we see is, at the same time, the massive fragrances are really continuing to grow high single digits, sometimes double digits growth. And this is really what we are trying to pivot now since 1.5 years, accelerating in fiscal '25, which is reflected in the figures that you saw during the presentation.
So the color cosmetics category per se is when you look at the gross margin of this category at Coty, it's quite high in terms of gross margin. So it's really something that is not a big difference versus our peers, who are more exposed to skin care, hence, higher profitability in this kind of mass market division. But if you compare color cosmetics to color cosmetics, we are quite close to our competitors. The thing that happened is that when we started as a team in 2021 to reposition the division, we had to reinvest in building an innovation pipeline, in increasing marketing spend, in strengthening brand reach, relevance, equity, stabilizing the distribution, which led to investments that really weighed on operating margin for some time.
Importantly, what we saw is that we had tangible results for this color cosmetics category, first with a stabilized shelf space; and second, with probably the strongest brand equities in many years in this division. At the same time, the market has continued to evolve, and we've seen the rise of in these or dues depending on how they are positioned, which at the end of the day, did not grow the full market. And that's what I did say last quarter is that this color cosmetics market in mass market needs to be a story of legacy plus indie rather than just a story of indeed, who are failing to grow the total market.
So on this side, what we are doing on the color cosmetics part is that we are making our efforts even more granularly decisive, meaning that we've made a lot of studies to understand what are the lever that can support properly the brands with the highest return on investment, which really allow us to free some resources to put them behind mass fragrances, which are, by the way, much more profitable with gross margins much higher than color cosmetics. So that's the key shift that we are operating in this division, still continuing to do the right things behind Color Cosmetics while freeing investments to support what is growing and what is much more profitable for us, which is mass fragrances.
To finish on this, I can give you one good example of what we have done with Rimmel in the UK, which is a very interesting example of what is the right playbook to be successful in this business. So on Rimmel in UK, we have put in place a combination of number one innovations that were Prestige inspired, if I may say, I'm thinking about the [butter] the multitasker concealer, which went very, very strongly viral and also benefited from very strong always-on influencer content, organic consumer content plus advocacy activations using TikTok TikTok shop sorry, for the first time, which led to a brand Halo and a strong momentum on Amazon. Altogether, this requires less investment than the classical launches we were doing before. But at the same time, they allowed us to stabilize the market share of the brand in the UK for the first time in three years.
So at the end of the day, we feel that we are finding the right recipe to support color cosmetics with a little bit downsized investment while having better results, while reinvesting behind the mass fragrance category.
Now there was a second question around promotional environment. Laurent, you want to take it?

Laurent Mercier

Yes. So indeed, I mean, as we indicated, I mean we are seeing some of our peers. I mean playing really some strong promotions. And we are really making sure that in our portfolio that we are protecting our brands versus this approach.
So now we are really dedicating teams working on SRM, so strategic revenue management, working on the portfolio really working on the segmentation of the portfolio on the innovations. So indeed, yes, there is this context. But again, back to the point that Sue was referring to, we are making sure we are protecting the gross margin and really that we keep sufficient ammunition to support the brands.

Operator

Bonnie Herzog with Goldman Sachs.

Bonnie Herzog

I actually had a question on FY '26 phasing. You called out gradual improvement in like-for-like trends over the course of the year, compared to expected weakness in [F Q4.] So first, as we think about the gradual improvement, should we expect continued declines in 1H, especially maybe in Q1 before you return to growth later in the year? And then second, how should we think about the timing of your new blockbuster launch that you mentioned in 1H. Could it add to growth in Q1? Or is this more about an Q2 story?

Laurent Mercier

Yes. Thank you. So indeed, just to give more details indeed on the phasing. So I mean, in the current uncertain macro environment, so we want to stay and we want to be prudent around the outlook. And indeed, so we are currently seeing indeed that some -- there will be some decline in sales in H1. However, we expect the trend to be better than Q4.
And this trend will gradually improve over the course of the year. So this is really what we are seeing. So then -- how this is built, I would say, more or less the same components as you just explained that we think that this decline will remain largely driven by Consumer Beauty, again with Color Cosmetic category remaining under pressure and still in this H1 fiscal '26.
And at the same time, okay, we are seeing the Prestige pretty muted, but I will say, more headwinds on the cosmetics and skin care, but fragrance remains strong. And step by step is really that we can reconcile our sell-in and sell-out. And indeed, this will be supported by big initiatives in Prestige fragrance that indeed will comment now.

Sue Nabi

Yes, Bonnie. To complement and to answer your question, indeed, this first half and of fiscal '26 and the full fiscal '26, we are back to the fiscal '23 and '24 recipe of success, which is to put in place this game-changing blockbusters, okay? So that's the first thing I wanted to really reinsist on. It's probably going to be the best type of innovations in the last five years. And this new launch that you are referring to will have an impact on Q1.

Operator

Korinne Wolfmeyer with Piper Sandler.

Korinne Wolfmeyer

I'd like to touch a little bit on the tariff dynamic. You were able to quantify the impact, and it seems like it's going to be more of the fiscal '26 event. But can you give us a little bit more insight on kind of like the progress of offsetting that tariff impact throughout fiscal '26? Is it going to be immediate? Is it going to be more throughout the year? And then as we think about pricing coming in, to help offset which categories are going to see some of that pricing increase? And then how are you thinking about the elasticity of that?

Laurent Mercier

Yes, absolutely. I mean, good morning. So I mean, first of all, I really want again to emphasize that, I mean, we are pretty well positioned in this context. And it's always that our geographical footprint in terms of sales, but also in terms of manufacturing is creating some, I would say, a healthy position.
I just want to give concrete examples that our color cosmetic factories for US brands are in the US talking about CoverGirl, talking about CoverGirl here, we have released the best protection and talking about Prestige, Prestige fragrance. Yes, we have -- most of our production is in Europe, and you know that we have the biggest factory in Barcelona.
We have also a Prestige and fragrance factory in the US okay, and also skin care. So we have released this protection. So having said that, and we indicated that we see the impact being in the low EUR 100 million. This impact is driven by Prestige fragrance due to these sourcing in Europe, but it's also due to components, marketing materials, GWP. So I would say it's more marketing stuff, so it's not finished good, but which indeed is sourced from China. So this is indeed the sizing that we are sharing with you based on the current assumptions.
So now we are taking -- and we started even before to make some actions. Number one, we built inventory before this tariff came in place. So that's why we indicate that we are well protected at least till end of fiscal '25. So this is indeed something which is more coming for fiscal '26.
So there is indeed the phasing. Number two, back to my point on components and marketing materials, procurement already started even before to work actively on change of sourcing and we need to reallocate these sourcing production. And we have already some actions in place because we built also this dual-sourcing approach, but we are accelerating. So this is absolutely what we are doing.
From a manufacturing standpoint, we have levers -- we have levers. And as I shared, we have we have already factories in the US So we can make decision to Prestige fragrance line to the US if needed. But this is something that we are contemplating versus how the situation is evolving.
But we can do it indeed with a moment on investment, which is reasonable, okay. We don't need to build a factory. We have already a factory.
So the last element is about pricing. So indeed, we shared that we are implementing mid-single-digit price increase on Prestige. So this is what we are doing. And again, we use the same recipe as we did a few years ago, we have a dedicated pricing office.
We are very granular. We do it in a very precise manner. Again, we are leveraging our tools about strategic revenue management, playing between mass fragrance, entry premium but also high end. So there are also levers was explaining also about the pan spray, which is also a segment, which is growing very fast. So we are really playing with all these levers.
So that's why -- I mean -- and we have the data that this category is pretty inelastic versus price increase, this is what we got from the last years when we did strong price increase, and you saw that the category kept growing in terms of volumes.
So we are tracking very carefully. But indeed, we are pretty confident that we can do this indeed without impacting the volumes. So we continue to monitor the situation and to see how it evolves based on the final decisions about these tariffs.

Operator

Oliver Chen with TD Cowen.

Oliver Chen

Laurent, regarding retailer replenishment. What do you see happening over the next quarters and years? And what are the implications for how you're managing your own inventory. Second question is on organizational changes in the US that you mentioned. Would love your thoughts on how that will drive more agility and what's happening? And as you think about regionalization versus centralization, it sounded like both of those are different opportunities for different reasons?

Laurent Mercier

Yes. Thank you, Oliver. So retailer replenishment, indeed, this is something that we flagged already a few quarters ago. I mean we are seeing retailers being very disciplined and tight on their cash management, very strong on their inventory. So this we see in both divisions. It started really, we saw it first in Consumer Beauty, Color Cosmetic, but we see it also now I mean in the Prestige division. So we are really seeing retailers being very tight on their inventory. So -- and this is also back to what we are sharing about the Q3 and the Q4 trend, indeed, we are seeing these retailers moving from I would say, pretty high inventory and now being really to very low inventoryDigitalBank.
So this is really a new pattern. I mean and this is also exacerbated now by the acceleration of the e-com players and to name the biggest one, Amazon, who are extremely strict, extremely disciplined, extremely well organized on the inventory management and -- and you see, of course, the traditional retailers, of course, they are now need to take also the same approach to optimize their cash.

Sue Nabi

And then on the second part of your question, Oliver, which is around the organizational changes in the US This was something that we've been working on for now quite some time. We believe that when we reorganized the company back in 2021, we had to give, I would say, a lot of power to central organizations because we had to rebuild marketing strategy, brand equities to make sure that everyone is aligned behind the same goals, the same ways of doing the same culture.
We believe this is the right moment to give the power to regions specifically now that the brands and the way of doing is quite different from one region to another. So we created a new region, which is a region that is English-speaking region with the US, UK, Canada, Australia and New Zealand. And this -- with the new leadership team that is in charge of it to really balance local versus global so that there is a rapidity of decision and then that there is more nimbleness, more ability to make decisions that are 100% driven by local, I would say, constraints or opportunities versus just what used to come from Central as a guideline.
So this globalization of the world is translated into a globalization of our organization. Global still had a key, I would say, power, but local has as much power as global today. So that's what I believe is making probably going to help us, sorry, to regain the momentum, specifically in the US You probably noticed that the immense majority of our decline is US driven, for many regions.
One of them is to strengthen the leadership teams under management and the ability to execute properly. The other one is that the US market is indeed the market where Burberry Gerdes, Kylie, Cosmetics and of course, Marc Jacobs Daisy where the biggest successes, so this is really what created the biggest comp in this country more than anywhere else around the world.

Operator

Stephen Robert Powers from Deutsche Bank AG

Stephen Robert Powers

And this question may build a bit on Oliver's question there on the US organizational changes. But if we think about the cost savings initiatives that you've announced and accelerated recently more holistically. Is there a way to parse what proportion of them do you think you would have done in any environment such that we might consider them truly structural versus those that maybe have been pulled forward more in reaction to the current environment, sort of belt tightening such that they kind of may come back into the cost structure when conditions turn more favorable, even if they come back in a slightly different form?

Laurent Mercier

Yes, thanks for the question. So I mean these are really structural interventions. So it's really -- and I think it's important to always to insist we are really in a mode of constantly rethinking and rechallenging our organization and ways of working because the world is moving very fast. So what -- so explained, is really the change of organization is also in a context where indeed with this omnichannel is changing very fast. So I was explaining what we do in US
I just want to give also the example about Europe, where you are seeing that retailers are moving also to cross-country approach, and this is something, of course, that we are really matching very, very quickly. That's also the case about the e-com players. I mean, e-com players, of course, they are playing a game, which is cross country. So it's really that by doing this, adjusting organization is really to gain agility, flexibility and also, of course, is really optimizing our cost structure always with this mindset that we can refuel the brand and reorganize. So indeed, it's structural. And this is something that we continue on a ongoing basis is also leveraging technology.
You remember last year, we shared with you that we implemented successfully as foreigne, I mean it was very flawless. And now we're also leveraging this technology of course, to optimize our ways of working. And we will continue, of course. And yes, so the structural change is also helping to address and to manage, I mean, the current very high volatile environment.

Sue Nabi

And Steve, to complement on Laurent's answer, I would say that this is really structural changes with the dose of conjectural changes, if I may say. Laurent was referring earlier to the rise of the likes of Amazon, which might become the one beauty retailer in this calendar year. But at the same time, while Amazon is growing, you have a new challenger called TikTok Shop, which represents, I think, already $3 billion of sales which is, at the same time, entertainment and sales in the same platform, in the same place. And this one is even challenging classical player of retail. So there is really this kind of moves that are happening under our eyes, and we absolutely need to adapt on almost on a monthly basis. So it's really both.

Operator

Olivia Tong with Raymond James.

Olivia Tong

First, just a point of clarification on Consumer Beauty. If you could help clarify what drove volume to be flat while price/mix was the driver, the weakness in Q3 wouldn't have expected that to be the case. And then building on the all-in-to-win plan, could you talk about what's new about the streamlining that you want to do as part of this plan versus the savings you were targeting in the prior plan, where the head count reductions are coming from?
And then as you think about your portfolio, should you be in all the brands that you have? Are you scrutinizing your portfolio, thinking about potentially exiting some underperformers or repositioning some of the underperformers?

Laurent Mercier

Olivia. So on the gap between volume and pricing, I mean, the big reason on Consumer Beauty is that as you understand, where we had really gaps and the performance was really on the color cosmetic and we flagged mostly about the US
But on the other hand, as you know, we are very good performance in Brazil where we have significant volume growth. But indeed, the net revenue or the price per unit in Brazil indeed, is lower versus the rest of the countries of the US So this is what's driving indeed this gap indeed between volume and price. So indeed, it's mostly geographical mix.
So on your second question about streamlining support functions. So what we shared and -- and we will keep you posted when the process indeed is in motion. So it really it's about consolidating and centralizing support function activities. And indeed, it's also to align support function also with the new commercial organization that Sue was describing, okay? So again, if I give the example of the Europe, where we are seeing retailers, where we are seeing e-com players playing really a cross-country approach is really that we are making sure that indeed we are streamlining our support function according to the commercial organization.
We already started, as you know, we shared last time, we already started with the consolidation of demand planning into a single hub. So this is really what is already in motion for supplier really to manage the demand and the forecast and here, again, to leverage technology. And it's also now that we can enable also some AI tool in this demand. And as I shared before, also on support function, now we can also leverage the strong footprint that we built last year.

Sue Nabi

And to answer the second part of your question around the portfolio, Olivia. As you know, like most of the operations in this business, we are always and constantly evaluating the pertinence of our portfolio and the long-term opportunities. And of course, ROI driven by each and every brand, each and every category and each and every market. Will we keep all the brands in the portfolio, not necessarily. And the best example is what we've just started to do with SKKN, what we did with SKKN recently, which was announced during Q3.

Operator

Ashley Helgans with Jefferies.

Ashley Helgans

So I know you talked a little bit about retail inventory levels. So wondering if you could just talk a little bit more about how selling and sell-out trends or retail tightening varies by region. And then also for the mid-single-digit price increases planned this summer, is that going to be total prestige portfolio or select brands?

Laurent Mercier

So indeed, I mean, selling versus sellout, just to be very clear, and we share that we are seeing indeed in this quarter some disconnect in the US And this is really what's driving most of our decline. And this is really what we are working on actively really to reconcile our sell-in and sellout. So this is the work we are doing, and we will start to see the results in fiscal '26.
I mean on the other regions, I mean, Europe remains very healthy category, if I talk really about Prestige fragrance is very healthy. And here, we are really a bit sell-in and sell-out up pretty well in line. So we are tracking very carefully. But again, all the regions are very healthy. LatAm Brazil, as I said, okay, also, we are managing tightly. And Asia, as you know, is pretty small for us. So China is very small. So I mean -- but also we are seeing still indeed some headwinds in China, but it's pretty limited for us.
At the same time, I want again, and this was the previous question to insist about the fact that we are seeing our retailers being very aggressive on their inventory management. So this is something that indeed is more on the retailer side, which could still create some volatility indeed between the sell-in and the sellout. And this is obviously also exacerbated in the current context where we are seeing indeed some slowdown in the consumer beauty category and some normalization in the prestige category. So that's why we remain very cautious, especially about the H1 fiscal '26.
So that price increase again, we are focusing first on the Prestige US because there is just a mechanical effect that due to the sourcing from Europe. And this is a case of all players to make it very clear, that -- so it's really the normal adjustment that we have to operate. And again, because we are pretty confident on the inelasticity of this category. Now having said that, yes, we continue to be very active and we need to look carefully at other categories and also at other regions. And indeed, when we see that we can implement price increase with low elasticity. This is, of course, something that we will contemplate and put in place and also to continue our gross margin expansion journey.

Sue Nabi

To compliment on Laurence's point, Ashley, is that what we is going to happen being not elastic in terms of price increases behind prestige of fragrances of the toilet par. We are at the same time making sure we have we increase the number of touches on the piano of scenting with body mists, with small formats, with pen sprays.
To a level that was not done in the past, we believe that the conjunction of the two should keep a healthy demand either with consumers looking for value proposals and they find them behind our brands, or those who are just trying to increase the wardrobe effect or at the end those who are trying a small sample before moving to a bigger content and size. Operator

Operator

Andrea Teixeira with JPMorgan.

Andrea Teixeira

So my question is on the US color cosmetics. Looking at the success you had elevating email in the UK, and I know you've invested in the studios here in the US as well to modernize your way to get to the consumer. In retrospect, why it worked well abroad and not here? And what is the new leadership we are aiming to do differently from the past -- or do you think structurally, the markets are completely different here? What works here wouldn't work in the UK and vice versa?
And a follow up to Lohan's point about the CNY370 million to win, of course saves, how much will go and flow through to the bottom line.

Sue Nabi

Yes. Andrea, your question is a valid one. I have to say yes. So at the end of the day, what we see is that, indeed, as you quoted it, there are structural differences, but it's a question of intensity rather than a question of what is at stake. So at the end of the day, both European and US markets are seeing a disruption coming from indie or new brands, but this is to a much bigger extent in the US
So the reason why you don't see this happening as quickly as we showed in the US behind CoverGirl name it, is that probably the US market is a much more competitive market. The exposure of dupe brands is much higher, especially in terms of sales space.
And the third reason is that what we are doing is that we use this part by testing new ways of doing in the UK before implementing this in the US That was also the rationale behind having the same head of the region out looking at the US at Canada, at UK and not Australia and New Zealand, which are markets with more or less the same portfolio of brands English-speaking market, it's more or less the same dynamics, but 2 different intensities and different patients.
So we believe that the portfolio -- sorry, the business model we have put behind Rimmel, especially recently with a test on TikTok shop we've done in the UK something we are starting to implement behind CoverGirl next month, in fact, starting mid of May. So this is really something that hopefully will give us the same kind of results, and that's the way we work on this part of the business. So how much of the $370 million savings will flow through the bottom line? Maybe Laurent, you can tell on this?

Laurent Mercier

Yes. Thank you, Andrea. So I mean, first of all, just to recap again, I mean, how the $370 million is built. So it is really on the two coming years is really that we have $120 million, which is ongoing productivity -- and then on top of this, I mean, the programs that we announced two weeks ago is adding up $130 million in addition to this ongoing productivity. So what's very important to have in mind is that as we discussed, these are structural intervention.
The objective number 1 is really to create some headroom and we need to manage the current volatility. And as you understand, there are a lot. I mean tariff is one. So we are really working actively so to do this.
Number two, of course, is really to be in a position that we are using part of this money to invest in our brands, to invest in all our initiatives, who was referring indeed to the big innovation that we have next year on Prestige fragrance indeed, but it's also that we need to continue and we are continuing really to invest on the other categories, Mass fragrance is a big one, but we need also to defend the other the other segments. So that's really the objective.
There are also some elements that talking about next year, as I shared that -- in fact, this year, there is also some short-term variable compensation, which are helping the EBITDA this year and will reverse next year. So again, the objective is really to create a headroom to be back to a normal algorithm. But ultimately, the end game is that is really to continue constant EBITDA margin improvement as we flagged in several forums. And again, this year is a clear example that we are accelerating and we will grow our EBITDA margin by 70 basis points. Again, fiscal '26, there will be some reverse one-off effect, but ongoing is to continue to improve our EBITDA margin by 20 to 30 basis points. So that's really part of the cycle. using this money to reinvest to be back to the virtuous cycle and indeed to continue to improve our EBITDA margin.

Operator

Anna Lizzul with Bank of America.

Anna Lizzul

I was wondering if we could take a step back just thinking about the current market conditions for Prestige versus Consumer Beauty. On the Consumer Beauty side, we've seen some weakness in lower income tiers just in US Mass Beauty, broadly speaking. I was wondering if you're seeing some of this drive the incremental weakness here. And then in Prestige, are you seeing any slowdown or incremental weakness from higher income consumers?

Sue Nabi

Anna, this is Sue speaking. So let me start with the Prestige division, and may be Laurent, you can do the Consumer Division. So we end up together on this question. Prestige division regarding if we are seeing a slowdown, as I mentioned earlier, -- so far, we have seen this kind of normalization that happened between fiscal '24 and fiscal '25, which was moving from either high single digits or low teens to mid-single digits, which was really the way we've been guiding regarding how this market will evolve globally. And this is still the case, including with the latest numbers we got on the March quarter. So this, we don't see.
Another element that we are also looking at is how the different markets are impacted or not by the Indies or Dukes phenomenon, if I may say. And if there is one market that is seeing a consolidation and a growing portion of, I would say, historical brands or designer brands. It's really the fragrance one, where it's increasing year-over-year versus other markets like color cosmetics where you clearly see that in dukes are taking a small portion of this market.
So clearly, the Prestige fragrance market structurally is continuing to grow, and we believe this is going to intensify specifically now that the number of touches of the P&O are increasing with body mist that we believe are in a kind of very generous Eau de Toilette version of upper perfume. You can think about the pen sprays, which are allowing people to play the wardrobe effect or to test a fragrance or just because they don't have the ability to buy something more expensive, this is going to continue to drive the penetration of this category.
Now when it comes on Color Cosmetics for Prestige, we believe that the pressure on Color Cosmetics is going to continue be it in Asia and in Travel Retail Asia were the regions that were mentioned by some of our peers, namely the disappearance of the Daegu phenomenon in this key region of the world. But also what we are seeing, for example, in some regions, that the brands that has been doing the growth for the last years, specifically on Prestige color cosmetics such as designer brands, not designer-branded such as Indie brands are the drainers of this market in a way.
So what we saw in color cosmetics in mass market is also happening in Prestige meaning that people are probably refocusing on values that are value, as we say in French, versus trying again and again, new things at the same time. So that's what I could say about what we see behind Prestige market, namely on color cosmetics and fragrances. On mass market, Laurent?

Laurent Mercier

Yes. Thank you, Anna. So on mass market, again, what's very important is really to understand that this category, currently, we are seeing two different dynamics. So if we take Consumer Beauty, as we indicated, I mean now -- I mean, this quarter, I mean global category entered really negative, so low single-digit negative. And when you open this category, you see that indeed it's color cosmetic mid-single digit negative. But on the other hand, you see that mass fragrance is close to high single digit or even double digit. So there are really these two speeds that we have to manage.
Now in our model, we are assuming in fiscal '26 that Color Cosmetics category will remain negative -- this is really the assertion that we are making. On the other hand, of course, we are really betting strongly on the mass fragrance acceleration. And as you know, we are very well positioned. I mean, we are the one worldwide on this category. On US we are two to three.
We have very strong initiatives. So it's really currently the work we are doing in terms of resource allocation. So it's really on the one hand, is really capturing the growth opportunities from the mass fragrance, and you have concrete example with and there is more to come.
And at the same time, of course, on Color Cosmetics we need to be very targeted, really focusing on big innovations, really playing all these games, the advocacy and and the gens. So this is currently what we are contemplating for fiscal '26 really with this really a model in the consumer beauty.

Operator

That does conclude the question-and-answer portion of today's call. I would like to turn the call back over to Sue for any additional or closing remarks.

Sue Nabi

Yes. Thank you very much for giving me this opportunity, and thank you for the questions. So let me zoom out for this closure remarks.
As you know, across the latest economic cycles, again, what we have seen is that beauty has remained resilient in these 4 decades. Even in this very challenging landscape, we have, as you know, it significantly strengthened our strategic operational and financial fundamentals. We've been driving gross margin expansion.
We've been driving a stronger cash flow generation. We've been substantially deleveraging the company over the past four years. Of course, while we are not satisfied with our net revenue performance in fiscal '25, our strong fundamentals coupled with our multi-branch attack plan, which is the best in the last five years, with being back to the recipes of '23 and '24, other initiatives being distribution and efficiencies, all of these give us strong confidence for the years ahead. Thank you very much.

Operator

Thank you, ladies and gentlemen. This concludes today's program, and we appreciate your participation. You may disconnect at any time.