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Coty was hit by a raft of challenges in fiscal 2025, including dampened demand from consumers in the US and Asia, and “innovation fatigue” in colour cosmetics.
The Paris-based beauty conglomerate said on Thursday that its revenues for the full year ended 30 June fell 2 per cent year-on-year on a like-for-like basis to $5.89 billion. Fourth-quarter revenues were down 9 per cent to $1.25 billion. Shares fell almost 20 per cent in pre-market trading on Thursday.
“Coty is operating from a position of reinvigorated strength after five years of transformation and proven execution,” CEO Sue Nabi said in a statement. “In full year 2025, despite headwinds from US softness, retailer destocking, fragrance phasing off a strong 2024, and pressure in mass cosmetics, we moved with speed and focus to return Coty to a path of consistent and profitable growth.”
“We realise our results are not satisfying,” Nabi conceded on Thursday’s investor call. “We are acting with urgency, especially in the US. We have taken all the required action and we have a clear plan with first and very promising green shoots. The company is now more focused and financially stronger than ever,” she said. “Of course, no one is immune to relativity, but these results do not reflect the potential and value of the business we are building, so we are confident that the real strength of the company will be recognised and visible as quickly as possible.”
In the prestige division, which includes licensees Marc Jacobs, Burberry and Jil Sander, full-year net revenue was flat year-on-year at $3.82 billion. Revenue from the consumer beauty division, which includes brands such as Covergirl, Rimmel and Max Factor, was down 5 per cent year-on-year to $491.8 million.
By region, the Americas were down 3 per cent to $2.37 billion in fiscal 2025. America sales were impacted by reduced net revenue across consumer beauty in the US, driven by ongoing weakness in the mass colour cosmetics market. EMEA (Europe, the Middle East and Africa) revenues were up 1 per cent to $2.81 billion. Asia-Pacific fell 7 per cent to $708.1 million. The Chinese beauty market is gradually improving, said CFO Laurent Mercier, thanks to the performance of prestige beauty.
By comparison, Estée Lauder Companies (ELC) said on Wednesday that sales fell 8 per cent in fiscal 2025, citing impact from strains on consumer confidence and travel retail sales. L’Oréal Group is faring better, reporting a 2 per cent rise in Q2, which it credits to strong sales in China.
Nabi said that consumers are suffering from “innovation fatigue” in colour cosmetics, and that the industry — Coty included — fell into a cycle of too-fast, too-complex product launches. “A lot of loyal consumers above 30 years old got lost in translation given the complexity,” Nabi told investors. “Of this category today, a lot of people don’t know the difference between an ink, a butter, a liquid lip colour, a bullet lip colour — the list goes on. So there is an innovation fatigue, and we used the influencer marketing tool to talk to everyone.” The company now dedicates its most sophisticated products to its younger consumers, she said, because they “easily get into the complexity”.
Coty is doubling down on fragrance. Nabi attributed the company’s confidence in the category to the “treatenomics phenomenon”, aka the economy of treats. “We see that fragrances from $5 to $500 are becoming the go-to destination in the beauty industry,” she said. Nabi also highlighted the dynamism of the category. “This explains why a lot of consumers today are continuing to buy fragrances at every price level, including in mass fragrances. They are also diversifying the way they wear fragrances, hence our perfume mists.” It’s a profitable market, Nabi said, noting that it’s one where Coty will continue to “play big”.
Regarding tariffs, the company said it is strengthening its competitive advantage by transferring production of mass fragrances, entry prestige fragrances and other adjacencies sold in the US to Coty’s domestic manufacturing plant. Coty expects the tariff mitigation plan to contribute meaningfully to results in the second half of 2026.
Consistent with its prior outlook, Coty expects a gradual improvement in sales trends over the course of fiscal 2026. It anticipates a like-for-like decline of between 6 and 8 per cent in the first quarter, followed by a 3 to 5 per cent dip in Q2, with a return to growth in the second half of the year.
“We didn’t give you more precise numbers on H2 because there is high volatility,” Mercier said. “There are a lot of micro movements, but I can tell you with a high level of confidence that our H2 will be back to growth.” Nabi concurred: “This [2026] is the year of increasing the profitability of this business.”
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