Coty Lowers Full-Year Outlook Amid Q3 Sales Decline and Market Headwinds
Cosmetics giant Coty Inc. reported a 3 per cent decline in like-for-like net revenue for its third quarter, totaling $1.299 billion, slightly below analyst expectations of $1.3 billion. The company attributed the shortfall to a challenging global retail environment, which prompted it to revise its full-year sales outlook, now forecasting a 2 per cent decline in fourth-quarter sales. Following the news, Coty shares dropped 7 per cent. CEO Sue Nabi described fiscal 2025 as a “pivotal and transitional year,” citing cost-saving measures, including a 700-job cut, as part of a strategic overhaul to prepare for a more stable 2026.
Both prestige and consumer beauty segments faced setbacks, with prestige sales down 2.5 per cent and consumer beauty falling 5 per cent. The prestige portfolio was impacted by underwhelming follow-ups to previous blockbuster launches like Burberry Goddess and Marc Jacobs Daisy, while mass-market makeup continued to struggle amid rising competition from cheaper dupes and social commerce. Nabi said Coty will now prioritize product innovation and expand its presence on platforms like TikTok Shop and Amazon, beginning with the upcoming launch of CoverGirl on TikTok Shop.
Regional performance reflected broader market challenges: sales in the Americas fell 1 per cent, while EMEA and Asia-Pacific declined 1 per cent and 4 per cent, respectively. Nabi also addressed concerns around tariffs, noting Coty’s strategic advantage due to local production in the U.S. for consumer beauty products, while considering long-term shifts in fragrance production to the U.S. to reduce reliance on Europe. Despite current pressures, Coty anticipates a turnaround in 2026, supported by innovations in fragrance and makeup and the launch of Marc Jacobs cosmetics.
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