Coty Inc. is navigating several challenges in fiscal 2025, including a cooling fragrance market (though the category is still strong overall), a weakened U.S. marketplace and a struggling consumer beauty cosmetics segment. But it has a plan for turnaround in fiscal 2026.
Coty’s fiscal year 2026 plans include blockbuster product launches and the expansion of a major prestige brand into the U.S. market, alongside a new brand launch on Amazon. The company will also grow its portfolio with ultra-premium fragrances, body mists, pen sprays and additional scenting opportunities, per Coty. In consumer beauty, Coty plans to innovate within key mass fragrance brands, expand into body mists and adjacent categories, and launch new fragrance lines in collaboration with key retailers. Additionally, Coty will introduce advanced cosmetics technologies in mascara and nail products, while leveraging e-commerce and TikTok Shop to drive growth.
Coty Revises Fiscal 2025 Guidance Amid Sales Decline
While the company expects a "healthier business improvement" in fiscal 2026, it has revised its guidance for fiscal 2025. Coty now forecasts a high-single-digit like-for-like sales decline in Q4 and a 2% drop in full-year sales.In Q3, ending March 31, 2025, net revenue totaled $1,299.1 million, a 6% decline on a reported basis; Q3 net revenue declined 3% on a like-for-like basis. During the period, prestige sales dropped 4% and consumer beauty fell 9%.
For the nine months ended March 31, 2025, net revenue totaled $4,640.5 million, a 2% decrease year-over-year. Prestige net revenue totaled $3,059.6 million, which was "slightly positive year-over-year on a reported basis," while growing 2% on a like-for-like basis.
Consumer beauty, meanwhile, posted net revenue of $1,580.9 million, a decline of 7% on a reported basis.
Key challenges included an "uncertain market backdrop" and "FX headwinds," per Coty.
"Across economic cycles, beauty has remained resilient for decades," said Sue Nabi, Coty's CEO. "Even in this challenging landscape, we have significantly strengthened our strategic, operational, and financial fundamentals, driving margin expansion, stronger cash flow generation, and substantial deleveraging over the past four years. While we are not satisfied with our net revenue performance, Coty’s strong fundamentals, coupled with our multi-pronged attack-plan for accelerating innovation, distribution and efficiencies, gives us confidence for the years ahead."
Nabi continued, "2025 remains a transition year for Coty. In Prestige, we are absorbing the triple-headwind of a slowing fragrance market, lapping a blockbuster innovation year, and depleting elevated retailer inventory, all of which was particularly acute in the U.S. We are laser focused on entering FY26 with alignment between sell-in and sell-out, to create a healthy baseline for growth. In consumer beauty, we have begun recalibrating our business in response to diverging market trends between cosmetics on the one hand and fragrances on the other hand, taking into account our relative strengths. Our goal is to strengthen our cosmetics business while making it more profitable, while in parallel over-driving our mass fragrances business where we have leadership and a strong margin profile."
Nabi concluded, "Importantly, we are in control of our destiny and are already making the changes needed to address many of these challenges, with new leadership in the U.S. as the market has slowed in recent months, an updated organizational structure to drive faster changes and improved execution, and a robust cost savings program to protect our P&L and increase our firepower to accelerate our business."
