Coty 'not satisfied' with revenue performance as it advances growth plans

Coty has reported a 6% decrease in revenue to $1.299 billion (£978 million) for the third quarter ending 31 March, but anticipates a return to growth as it advances efforts to streamline operations.

The owner of Rimmel London and Kylie Cosmetics delivered a 2% increase in adjusted EBITDA to $204.2 million (£153 million), boosted by short term savings.

However, prestige revenue dropped 4% to $829.4 million (£625 million), impacted by declines in prestige makeup sales, a moderating prestige fragrance category, and elevated prior year comparisons related to major fragrance launches.

Meanwhile, the consumer beauty division saw revenue decrease 9% to $469.7 million (£353 million). This reflects lower sales in colour cosmetics and bodycare, partially offset by growth across mass fragrance and mass skincare.

Looking ahead, Coty shared its "robust" plans to accelerate the prestige growth in FY26 and beyond, including "blockbuster" new launches, the extension of one of its "major" brands into the US, and opportunities in fragrance.

In consumer beauty, revenue growth is expected to be driven by innovations across its mass fragrance brands, the launch of new fragrance lines co-developed with key retail partners, and the introduction of "cutting-edge" technologies within its cosmetics portfolio. This will be supported by a focus on high-performing channels, including e-commerce and TikTok Shop.

Wider company growth will be supported by the next phase of Coty's All in To Win programme, which aims to boost agility and scale while unlocking $370 million in fixed cost and productivity savings in FY26 and FY27.

Sue Nabi, CEO at Coty, said: "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.

"While we are not satisfied with our 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.

"Importantly, we are in control of our destiny and are already making the changes needed to address many of these challenges, with new leadership in the US as the market has slowed in recent months, an updated organisational structure to drive faster changes and improved execution, and a robust cost savings program to protect our P&L and increase our firepower to accelerate our business."

It comes as Coty is planning to cut up to 700 jobs as part of the new initiative aimed at streamlining its operations.

The company said the cost-saving scheme is designed to create a simplified, scalable operating model, reduce complexity across functions and markets, and sharpen its focus on key innovations and strategic market priorities.

Key pillars of the "next phase of transformation" include:

• Scaled markets and regions - Streamlining the organisational structure across key markets to unlock operational efficiencies, reduce duplication and better align with the consolidation in the local and regional retail landscape.
• Streamlined support functions - Consolidate and centralise support function activities, better aligning with the new regional structures.
• Boost innovation impact - Step-change innovation impact by identifying key launch priorities early in the process, and focus organisational efforts and resources into fewer and more impactful initiatives.
• Optimize general & administrative spending  Structurally reduce non-people fixed costs across all areas of spend.