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Coty’s net revenue shrunk 8 percent in its second-quarter earnings and declined 4 percent in the fiscal year ended June 30 according to its latest earnings report published on Wednesday, as the US beauty conglomerate weathers turbulent macroeconomic conditions on its journey back to profitable growth.
Revenue in the second quarter totalled $1.2 billion in line with analysts’ low-end expectations after the company cut its annual outlook earlier this year.
Earnings before taxes, interest, depreciation and amortisation (EBITDA) and adjusted operating income, at $1.1 billion and $852 million respectively, remain flat from the same period in 2024.
In a statement, chief executive Sue Nabi hailed Coty’s return to a healthier baseline, but noted continued headwinds from US softness, fragrance lapping a strong full year 2024, pressure in mass cosmetics and lower orders from retailers. The company continues to see success in blockbuster fragrance franchises like Burberry Goddess and Boss Bottled Beyond, and will unleash a “major attack plan” on the perfume mist category in 2026 (encouraged by the performance of its Calvin Klein body sprays) with launches planned across more than a dozen of its brands. Fragrance provides over 60 percent of Coty’s sales and a larger proportion of its profits.
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Initiatives from the company’s “All-In to Win” strategy announced in 2020, including reorganisations, layoffs and the adoption of AI-assisted processes, have delivered $140 million in productivity savings, said Nabi, who previously shared a goal of saving $240 million by the end of the 2026.
Coty is in the process of transferring production of its mass and entry-prestige fragrances sold in the US to an on-shore manufacturing plant to offset the impact of tariffs. Other plans for 2026 include a relaunch of Marc Jacobs’ cosmetics collection, new perfume launches from prestige label Swarovski as well as mass brands like Nautica and Adidas, the Walmart exclusive label Origen and further innovation for mass cosmetic brands Covergirl and Rimmel.
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