Coty is betting on fragrance mists and blockbuster launches to revive flagging sales after its annual revenues fell 4% to US$5.9bn “against a complex 2025 backdrop”.
The US beauty company’s shares plunged as much as 22% in pre-market trading on 21 August after revealing fourth quarter revenue fell 8% to $1.2bn, which was at the lower end of analyst expectations
Adjusted operating income for the year was $852m and EBITDA (earnings before interest, taxes, depreciation, and amortisation) was $1.1bn – both flat on the same period in 2024.
“In FY25, despite headwinds from US softness, retailer destocking, fragrance phasing off a strong FY24 and pressure in mass cosmetics, we moved with speed and focus to return Coty to a path of consistent and profitable growth,” said CEO Sue Nabi.
The next phase of Coty’s ‘All-In to Win’ strategy was announced in April and included slashing 700 jobs, a move which has delivered $140m of productivity savings, she added.
The business also “implemented a nimbler regional model with new seasoned US leadership to close the prestige sell-out gap and return to market outperformance”.
Other efforts highlighted by Nabi include elevating its CIO “to accelerate AI (artificial intelligence) across demand planning, procurement, media allocation, marketing content and back-office processes
She added: “Amidst the shifting global tariff landscape, we are strengthening our competitive advantages by actively transferring production of our mass fragrances, entry prestige fragrances and other adjacencies sold in the US to our US manufacturing plant, reinforcing our resiliency and relative cost advantage.”
Revenue in Coty’s prestige division, which includes Calvin Klein, Davidoff and Kylie Cosmetics, and accounts for 65% of sales, was down 1% on a reported basis to $3.8bn for FY25, as fragrance growth was offset by a drop in make-up and skin care.
Consumer beauty revenue, which includes brands such as Rimmel London, Max Factor and Covergirl, declined 8% to $2bn, driven by colour cosmetics and body care which was partially offset by growth in mass fragrance and skin care.
Coty’s 2026 outlook
Coty said that it anticipates a like-for-like decline in sales of 6% to 8% in the first quarter of the 2026 financial year, and a decline of 3% to 5% in the second quarter, followed by a return to growth in the second half.
The business is betting on blockbuster launches and fragrance mists to boost sales, and believes it is set to benefit from consumers looking for small treats during tougher economic times.
Nabi said: "Consumer demand for beauty continues to grow at a solid pace, with ongoing fragrance category outperformance, even as retailers are acting with caution in the current environment.
“Coty is perfectly positioned to win, as the only global fragrance player actively targeting both the high and low price tiers, playing into the booming 'treatonomics' trend where consumers look for a mood-boost in the highly uncertain economic backdrop.”
Coty is bringing back the momentum for “blockbuster launches”, Nabi said, with the recent launch of Boss Bottled Beyond “already exceeding our prior blockbuster benchmarks”.
She continued: “At the same time, we have unleashed a major attack plan in the affordable, complementary and strongly profitable fragrance mists category, with mist launches across more than a dozen of our brands rolling out in the coming 12 months and strong initial results on our recently launched CK mists.”
Coty also revealed that the relaunch of Marc Jacobs’ Beauty is expected in the 2026 calendar year, and Swarovski fragrance is slated to launch in 2027.
Marc Jacobs’ beauty line was launched in 2013 via brand incubator Kendo, but was later discontinued in 2021.
A comeback was promised in 2023 when Marc Jacobs and Coty extended its licence deal which already covered fragrance.
The relaunch comes amid fashion houses doubling down on beauty to boost sales.
LVMH has unveiled its first ever make-up line with legendary make-up artist Pat McGrath at the helm and Miu Miu expected to unveil a beauty range this autumn.