Key Takeaways:

• Coty shared Q4 results, ending FY 2025 in line with expectations.
• The company reported a 10% net revenue CAGR in prestige fragrance sales.
• The beauty conglomerate plans on further expansion in the fragrance mists category in FY 2026.

Following rumors that Coty is considering splitting the business into two parts, with a separate sale of its prestige and consumer divisions, Coty's fourth-quarter results for 2025 (Q4 2025) were in line with expectations. Sue Nabi, Coty’s Chief Executive Officer, and Laurent Mercier, Coty’s Chief Financial Officer, began the Q4 2025 earnings call by emphasizing the company’s progress over the last five years since Nabi and Mercier have been at the helm.

“Over the past five years, Coty transformed, refining our strategy, strengthening our portfolio, and consistently delivering results,” said Mercier. “We also consistently outperformed global peers, particularly in its prestige division, delivering like-for-like (LFL) growth ahead of global peers like L’Oreal,Estée Lauder, Shiseido, and LVMH’s Perfumes & Cosmetics division in most quarters from FY 2021 to FY24.”

Mercier also highlighted Coty’s strengthened leadership position in the prestige fragrance business: Prestige fragrances are now a $3.5 billion business for Coty, delivering a robust compound annual growth rate (CAGR) of +10% from FY21 to FY25. During the same time frame, the company also achieved a 2% net revenue CAGR in Consumer Beauty sales, substantial profit expansion, and a three-time reduction in leverage, contributing to 12 rating-agency upgrades.

“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 Nabi in a press release.

Coty is the only global fragrance player actively targeting both the high and low price tiers. The company is seeing gains on both ends of the fragrance market, delivering LFL sales growth in FY25 of 9% in ultrapremium fragrances, 2% in prestige fragrances, and 8% in consumer beauty fragrances.

"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,” added Nabi.

Approximately 12% of Coty's worldwide sales come from consumer beauty products, which are primarily manufactured in the US. Coty, like other beauty companies, manufactures most of its prestige fragrances in Europe, which constitute about 16% of its global sales. Amid the shifting global tariff landscape, Coty is transferring production of mass fragrances, entry prestige fragrances, and other adjacencies sold in the US to its US manufacturing plant.

“We are returning to our cadence of blockbuster launches ... 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,” said Nabi.

Coty FY2025 Key Metrics

For the twelve months ended June 30, 2025, compared to the twelve months ended June 30, 2024:

• Net revenue of $5.9 billion decreased 4% and included a 1% negative impact from foreign exchange (FX). On an LFL basis, net revenue decreased 2%.

• Prestige net revenue of $3.8 billion, representing 65% of the Company's total sales, declined 1% on a reported basis, but was slightly positive on an LFL basis, with Coty's prestige sell-out growing by a low single digit percentage in FY25.

• Consumer Beauty net revenue of $2.07 billion, representing 35% of the Company's total sales, declined 8% on a reported basis and 5% on an LFL basis.

• Reported gross margin of 64.8% improved 40 basis points, while adjusted gross margin expanded by 50 basis points to 64.9%.

• Reported operating income of $241.1 million declined 56%, with a reported operating margin of 4.1%.

• Adjusted operating income of $852.9 million declined 1%, with an adjusted operating margin of 14.5%, reflecting 40 basis points of margin expansion.

• Reported net loss of $381.1 million compared to net income of $76.2 million in the prior year. The reported net loss margin was 6.5%.

• Adjusted EBITDA of $1.08 billion declined 1% year over year (YoY), with an adjusted EBITDA margin of 18.4%, reflecting 60 basis points of margin expansion. The Company's adjusted EBITDA margin growth benefited from short-term savings.

• Cash flow from operating activities was $492.6 million and free cash flow was $277.6 million.

Coty Q4 FY2025 Key Metrics

For the three months ended June 30, 2025, compared to the three months ended June 30, 2024:

• Net revenue of $1.25 billion decreased 8% on a reported basis and included a 1% benefit from FX. On an LFL basis, net revenue declined 9%.

• Prestige net revenue of $760.6 million, representing 61% of the Company's total sales, decreased 5% on a reported basis and 7% on an LFL basis, even as Coty's prestige sell-out grew by a low single digit percentage in Q4. 

• Consumer Beauty net revenue of $491.8 million, representing 39% of the Company's total sales, decreased 12% on both a reported and LFL basis.

• Reported and adjusted gross margin of 62.3% decreased 190 basis points.

• Reported operating income of $15.5 million declined from $34.7 million in the prior year, resulting in a reported operating margin of 1.2%.

• Adjusted operating income of $67.7 million decreased 37%. The adjusted operating margin of 5.4% reflected a 250 basis point decline.

• Reported net loss of $72.1 million improved from a net loss of $100.2 million in the prior year. The reported net loss margin was 5.8%.

• Adjusted EBITDA of $126.7 million declined 23% YoY, with an adjusted EBITDA margin of 10.1%, down 200 basis points.

• Cash flow from operating activities was $83.2 million, and free cash flow totaled $34.9 million.

Coty Q4 2025 & FY 2025 Performance Breakdown by Category

Prestige

In FY25, Coty's prestige net revenue, making up 65% of total sales, saw a 1% reported decline to $3.82 billion, though it was slightly positive on an LFL basis. Fragrance growth was offset by declines in prestige makeup and skincare. Q4 FY25 prestige net revenue fell 5% reported (7% LFL) to $760.6 million, impacted by US underperformance and inventory adjustments, plus ongoing declines in makeup and skincare.

Despite revenue pressures, prestige profitability remained strong in FY25. Reported operating income was $580.6 million (15.2% margin), while adjusted operating income rose to $773.2 million (20.2% margin), up 120 basis points YoY. Adjusted EBITDA increased to $884.6 million (23.2% margin), expanding 140 basis points. In Q4 FY25, reported operating income for the segment was $38.1 million (5.0% margin), down 120 basis points, and adjusted operating income was $74.7 million (9.8% margin), down 110 basis points. Adjusted EBITDA for Q4 was $102.9 million (13.5% margin), down 60 basis points.

Consumer Beauty

In FY25, Coty's consumer beauty net revenue declined 8% to $2.07 billion, representing 35% of total sales. This decline was largely due to decreases in color cosmetics and bodycare, partially offset by growth in mass fragrance and skincare. LFL revenue also dropped by 5%. The segment reported an operating loss of $127.4 million in FY25, a significant shift from an $89.3 million operating income in the prior year.

In Q425, consumer beauty net revenue was down 12% to $491.8 million, driven by lower sales in color cosmetics and bodycare. The segment posted a reported operating loss of $16 million and an adjusted operating loss of $7 million. Q425 adjusted EBITDA declined to $23.8 million, with a 4.8% margin. The overall weakness in the global mass color cosmetics market, particularly in the US, impacted sales in both periods.

Coty Q4 2025 & FY 2025 Performance Breakdown by Territory

Americas

The US is Coty’s largest individual market and is responsible for nearly a quarter of sales, amplified by the major headwind in FY25 and the top driver for the company’s underperformance. While Coty has consistently gained share in prestige across most regions, it lost share in the US in both prestige and mass.

In FY25, Coty's Americas net revenue fell 8% (3% LFL) to $2.37 billion. Argentina's hyperinflation provided a 2% LFL benefit. In Q4 FY25, Americas net revenue declined 12% (10% LFL) to $511.2 million. The declines were due to lower prestige net revenue from tough comparisons and inventory rightsizing, plus weakness in US mass color cosmetics.

Europe, the Middle East, and Africa (EMEA)

In FY25, EMEA net revenue grew 1% to $2.81 billion, making up 48% of total sales, with growth in several European markets and Africa. However, Q4 FY25 EMEA net revenue decreased 4% (9% LFL) to $574.2 million due to lower prestige and consumer beauty sales, driven by inventory rightsizing.

Asia Pacific

In FY25, Coty's Asia Pacific net revenue decreased by 8% (7% LFL) to $708.1 million, making up 12% of total sales. This decline was due to softness in prestige and consumer beauty, primarily in mainland China, Australia, New Zealand, and travel retail, though growth in Asia excluding China partially offset this. Coty's regional sell-out outpaced the market. Q4 FY25 Asia Pacific net revenue fell 8% (9% LFL) to $167 million, mainly due to broad market softness. Notably, Coty's sell-out in most Asian markets, excluding China, grew nearly four times faster than the market, with strong double-digit fragrance and skincare sell-out.

Coty’s Future Outlook

Coty is leaning on a strong innovation pipeline in both prestige and consumer beauty to drive growth from FY26 onward. Key prestige initiatives include the global rollout of Boss Bottled Beyond, a multibrand push into fragrance mists (Calvin Klein, philosophy), a new blockbuster launch slated for 2H FY26, and the upcoming return of Marc Jacobs Beauty in CY26. In consumer beauty, Coty is expanding mass fragrances with brands like adidas, Nautica, and Vera Wang, while innovating in lip and complexion with CoverGirl and Rimmel.

Despite ongoing macro and tariff headwinds, Coty expects a gradual improvement in sales and profit trends across FY26. The company forecasts a LFL decline in the first half of FY26 before returning to growth in the second half, supported by major launches, channel expansion, and easier comparisons. Gross margin pressure and tariff impacts are expected early in the year, offset by cost savings from Coty’s All-in to Win program. Coty projects adjusted EBITDA growth in the second half of FY26.

Looking ahead to 2026 and beyond, Coty is doubling down on its core strength in fragrances, which now account for more than 60% of revenues and an even larger share of profits. As one of the top three prestige fragrance players globally and the #1 in mass fragrances across developed markets, the company sees scent as a structurally advantaged category, supported by enduring consumer loyalty, expanding usage, and broad accessibility across price points and formats.

Coty intends to sustain its dominance across the $5–$500 fragrance spectrum, positioning itself to capture growth despite the challenging macro environment.

“Skincare remains another key focus, and we will steadily build this business while remaining vigilant with our investment levels. We have strong scale and capabilities in mass color cosmetics, and our priority is to improve profitability,” Nabi told the press.

“Following four years of strong outperformance and with these plans well underway, Coty is poised to deliver consistent, multiyear profitable growth, fueled by our best-in-class capabilities, highly desirable brands, scaled operations, and strong ROI focus."