Financial Data and Key Metrics Changes - The company expects full-year EBITDA to be above $1 billion, despite headwinds from tariffs impacting gross margins [11][72] - The major gap in EBITDA for the full year is driven by tariffs, which if excluded, would result in slightly negative EBITDA [11][70] - Free cash flow is projected to grow in fiscal 2026 [12] Business Line Data and Key Metrics Changes - The prestige fragrance category remains healthy, with low to mid-single-digit growth, while mass fragrance is also performing well [7][21] - The skincare category outperformed the market by 11%, driven mainly by e-commerce, with Lancaster growing significantly in China [27][26] - The mass fragrance category accounts for approximately 7% of net revenues and is experiencing growth due to the Treatonomics phenomenon [20][21] Market Data and Key Metrics Changes - The Asian travel retail market is still heavily affected, but the beauty market in China is gradually improving, with prestige beauty showing positive growth [51] - The U.S. market is experiencing increased promotional activities, particularly in consumer beauty and color cosmetics [29][41] Company Strategy and Development Direction - The company is focusing on increasing profitability in the color cosmetics category while managing promotional activities cautiously [17][29] - There is a strategic emphasis on innovation, particularly in the fragrance category, with significant launches planned for the second half of the year [13][14] - The company aims to make travel retail a discovery channel for new products, enhancing exclusivity and consumer attraction [49][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current macroeconomic challenges but expresses confidence in returning to growth in the second half of fiscal 2026 [10][72] - The company is committed to divesting its stake in Velar and is actively contemplating options for this divestiture [62][102] - Management believes that the fragrance market will continue to grow, driven by consumer trends and the importance of scenting in daily life [39][40] Other Important Information - The company is implementing a new forecasting tool to improve inventory management and cash flow [81] - The management is focused on cash deleveraging as a top priority, with plans to refinance certain debts in 2026 [80][82] Q&A Session Summary Question: Can you provide more detail on the second half outlook? - Management expects sequential improvement in Q1 and Q2, with a return to growth in H2 as retailer inventory headwinds ease [6][10] Question: How is the company addressing the higher promotional environment? - The company is managing promotional activities cautiously and focusing on strategic revenue management to protect brand integrity [29][30] Question: What is the outlook for travel retail? - Travel retail is being positioned as a discovery channel, with exclusive product launches planned to attract consumers [49][50] Question: Are there any pullbacks in specific demographics for prestige fragrances? - Management reports no pullbacks in key demographics, with continued growth among Gen Z and Hispanic consumers [96][98] Question: What are the refinancing expectations around the 2026 maturity? - The refinancing will be consistent with the current secured structure, and the company is actively working on this [101][102]