Net Revenue Dips for Coty in Q3 and First Nine Months of 2025

Net revenue dipped 6% and 2% for Coty in Q3 and the first nine months of 2025.

While an uncertain market backdrop and FX headwinds led to declining Q3 sales, Coty is building “robust plans” to fuel operational and financial improvement in Fiscal 2026 and beyond.

“Across economic cycles, beauty has remained resilient for decades. 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,” said Coty CEO Sue Nabi. “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.”

Nine Months Ended March 31, 2025

For the nine months ended March 31, 2025, compared to the prior-year period, net revenue of $4.6 billion decreased 2% year-over-year and included a 2% negative impact from FX. LFL net revenue were flat year-on-year.

Prestige net revenue of $3 billion, or 66% of the company’s total sales, were slightly positive year-over-year on a reported basis and grew 2% on a LFL basis.

Consumer Beauty net revenue of $1.6 billion, or 34% of the company’s total sales, declined 7% on a reported basis and declined 3% on a LFL basis.

Reported gross margin of 65.5% increased 110 basis points year-over-year, while adjusted gross margin of 65.6% increased by 120 basis points.

Reported operating income of $225.6 million declined 56% year-over-year, with a reported operating margin of 4.9%.

Q3 2025

For the three months ended March 31, 2025, compared to the prior-year quarter, net revenue of $1.29 billion declined 6% on a reported basis and included a 3% headwind from FX. Coty’s Q3 net revenue declined 3% on a LFL basis.
Prestige net revenue of $829.4 million or 64% of Coty sales decreased 4% on a reported basis and declined 2.5% LFL.

Consumer Beauty net revenue of $469.7 million, or 36% of Coty sales, decreased by 9% on a reported basis, with LFL sales declining 5%.

Reported gross margin of 64.1% decreased 70 basis points year-over-year, while adjusted gross margin of 64.3% decreased by 50 basis points.

The Q3 and fiscal year-to-date reported operating results included a $212.8 million asset impairment charge primarily in Consumer Beauty’s color cosmetics business, reflecting the more challenged category trends in the US and Europe.

“We are much more strongly positioned to navigate the current complex dynamics including tariffs and broader macroeconomic uncertainty, supported by the strategic, operational and financial fundamentals which we’ve significantly strengthened over the last four years, even in the context of the highly constrained P&L,” said Nabi. “These improved fundamentals coupled with our multi-pronged plan of attack for accelerating innovation, distribution and efficiencies, give us measured confidence that business trends should gradually improve over the course of FY26.”

She said given’s beauty’s resilient category across economic cycles, prestige and mass fragrances are now positioned to be one of the better performing beauty categories as the “fragrance index” remains at play.

Regarding its prestige business, the company’s “robust” plans will accelerate growth in FY26 and beyond, including a blockbuster launch in 1H FY26, a blockbuster launch in 2H FY26, the extension of one of our major brands into the US, and plans to capture many scenting opportunities, including ultra-premium fragrances, body mists and pen sprays.

In Consumer Beauty, a strong program for 2025 and beyond includes new innovations under key mass fragrance brands, building on the Adidas Vibes collection; launching new fragrance lines co-developed with key retailers; expanding into body mists and other adjacencies; and introducing several new technologies under its cosmetics brands – all while over driving the winning channels such as e-com and TikTok shop.

All In To Win Program

The newly announced next phase of the company’s All In To Win program will boost its agility and scale while unlocking an incremental $370 million in fixed cost and productivity savings in fiscal years 2026 & 2027. These savings coupled with the pricing power of its brands are anticipated to offset the impact from the announced tariffs.

Outlook

As part of FY25 being a transition year, both in Q3 and Q4, Coty is continuing to clean the baseline including assuring that retailer inventories are rightsized relative to the current demand trends, that the company is rebalancing our resources within consumer beauty to overdrive its profit engines while scaling its cosmetics innovations. These efforts are targeted to prepare for a gradual improvement in sales trends over the course of fiscal year 2026, underpinned by multiple levers, including several major launches in both divisions, geographic and channel expansion and incrementally higher pricing contribution.

Coty is actively intervening in key areas of the business to set the company on stronger footing into fiscal 2026 and beyond. This includes “stepped up” fixed cost savings and productivity savings to protect the P&L and fuel its brands, and making concrete changes in its organizational set-up and leadership in key markets like the US to improve execution and sell-out trends.

The continuation of current category trends, coupled with Coty’s active interventions to clean up the baseline of the business to prepare for healthier FY26 business improvement, are driving Coty’s expectation for a high single digit LFL decline in sales in Q4. This translates to a 2% decline in FY25 LFL sales.

On the reported revenue side, Coty sees a mid-single digit decline in reported sales, which embeds a roughly 3% headwind from FX. The company continues to expect continued expansion in FY25 gross margins to approximately 65%, consistent with its prior outlook.