Coty Gets 2% Boost in Net Revenues in Q1 2025

Net revenues grew 2% for Coty in Q1 2025 on a reported basis and included a 1% headwind from FX and a 1% headwind from the divestiture of the Lacoste license, officials said.

Q1 reported net income of $79.6 million increased from a net loss of $1.7 million in the prior year, which drove a reported net income margin of 4.8%, up 490 basis points year-over-year. Adjusted net income of $128.1 million increased from $74.1 million with a margin of 7.7%, up 320 basis points year-over-year.

“As we enter FY25, the macroeconomic environment remains as complex as ever and the outsized growth of the last few years is now entering the normalization phase,” said Sue Nabi, Coty’s CEO. “Nevertheless, one thing is very clear: consumers continue to prioritize beauty in their spending routines, even as they pull back on many other consumer segments. And within the broader beauty backdrop, fragrances remain a top performing category. As a beauty leader, and increasingly as a beauty trendsetter, Coty remains at the forefront of fueling consumer desire and driving category growth through disruptive launches, new and improved formulations, and engaging activations and campaigns.

Coty’s Q1 net revenues grew 4.5% on a LFL basis, despite the very elevated comparison of the prior year, when Coty’s LFL revenues grew 18%. The Q1 reported sales growth was supported by strong growth in fragrances across all price points, including prestige, ultra-premium and mass fragrances, while some slowing in the mass cosmetics market and active order management by retailers pressured sales for both mass and prestige cosmetics. LFL revenue growth on a company-wide basis and in the Americas region includes a contribution of 1% and 2%, respectively, from Argentina, which experienced hyperinflation.

Prestige Q1 net revenues increased 5% on a reported basis, including a 2% negative impact from the divestiture of the Lacoste license, with net revenues growing at a strong 7% pace on a LFL basis, including very strong growth in prestige fragrances, which grew 6% as reported and 9% LFL. Prestige reported net revenue growth in Q1 was driven by solid growth in the underlying fragrance category and Coty’s brand performance, with double-digit LFL growth in the majority of Coty’s leading fragrance brands, despite lapping the very robust double-digit percentage growth Coty’s prestige fragrance business in the prior year quarter.

Consumer beauty Q1 net revenues declined 3% on a reported basis, reflecting a 3% headwind from FX, with LFL net revenues flat year-over-year off of elevated prior year comparisons when Consumer Beauty grew 10% LFL. In 1Q25, consumer beauty reported net revenues grew strongly in mass fragrance and mass skincare, partially offsetting declines in body care and mass cosmetics reported net revenues. For cosmetics, the weakness was concentrated in the US mass color cosmetics market which was further exacerbated by significant channel shifts, resulting in Coty’s US consumer seauty sell-in tracking well below sell-out.

Prestige Fragrance Market

The prestige fragrance market remains an outperforming category in beauty, even as growth has moderated by a couple of percentage points exiting Q1 from the low double digit percentage growth in FY24 and the early part of Q1. Coty’s prestige fragrance portfolio performed strongly, particularly in the EMEA and Americas regions, and the Company’s very strong growth in prestige fragrances, which grew 6% as reported and 9% LFL. In the United States, Coty’s sell-out and sell-in growth was impacted by the very elevated comparisons of the prior year, which included the blockbuster launch of Burberry Goddess, Coty’s biggest launch ever. In Q1, reported net revenue for the majority of Coty’s leading prestige fragrance brands grew by a double-digit percentage. Coty continued to grow the Burberry Goddess franchise, which contributed to the to the Burberry brand’s strong double-digit percentage reported net revenue growth. Marc Jacobs Daisy Wild and Cosmic Kylie Jenner remained top ranked fragrance innovation in their launch markets. In prestige cosmetics, Coty brands Burberry and Kylie Cosmetics each grew strongly in the quarter, while Gucci makeup declined due to weakness in the Chinese mainland and Asia Travel Retail.

Global Mass Beauty Market

The global mass beauty market continues to grow at a low-single-digit pace, with outperformance by the mass fragrance category which is growing at a high-single-digit percentage, confirming that consumers continue to prioritize the fragrance category across price points. In Q1, Coty’s mass fragrances outperformed the category, growing reported net revenues by a strong double-digit percentage fueled by adidas, Nautica, Beckham and Mexx, and Coty will continue to focus on amplifying its mass fragrance offerings to capture market share in this attractive category. At the same time, the global mass cosmetics category has decelerated to flattish performance, with moderate unit growth, and was further exacerbated by significant channel shifts, resulting in Coty’s US consumer beauty sell-in tracking well below sell-out. Coty’s consumer beauty e-commerce sales grew at a mid-single-digit percentage, ahead of the overall beauty market, as Coty continued to gain share in this critical channel. Coty social media advocacy strategy-maintained momentum, with strong earned media value results for viral Consumer Beauty innovations including CoverGirl Simply Ageless Skin Perfector Essence, CoverGirl Eye Enhancer 3D mascara and Rimmel Thrill Seeker Extreme mascara.

Coty continued to fuel its skincare strategy. Lancaster delivered mid-single-digit percentage net revenue growth as it kicked off the brand’s revamp in Europe, supported by its unique positioning as the photo-aging prevention and repair expert, the launch of its Golden Lift skincare range, and the expansion of Ligne Princiere into the European market. For Philosophy, active engagement with dermatologists and influencers, aided by its newly opened influencer studio in New York, resulted in over 70% growth in the brand’s earned media value. Orveda continued to expand its footprint with the opening of the La Maison Orveda in New York City, the next step in its brand building and distribution expansion.