Coty's Q3 revenues take hit amid Middle East conflict disruption

Coty has revealed that in its third quarter ending 31 March 2026 net revenues decreased by 1% on a reported basis to £1.0 billion ($1,281.6 million), citing disruptions caused by the Middle East conflict.

The owner of Kylie cosmetics highlighted that on a like-for-like basis, net revenues over Q3 declined 7% compared to the same time period in 2025, which included an estimated 1.4% headwind from the conflict in the Middle East.

In the EMEA region, it reported that net revenues in the third quarter decreased by £9.8 million ($12.4 million) year-over-year, primarily driven by lower sales in the Middle East, France and Central and Eastern Europe.

Coty's adjusted EBITDA for Q3 saw a 38% decline to £100 million ($127 million), primarily reflecting lower sales and gross profit.

Overall Coty noted that while consumer demand for beauty remained resilient, with continued growth in fragrances and cosmetics, the conflict in the Middle East had continued to weigh on sales.

Across Coty's Prestige division, which accounts for 65% in total sales, it reported net revenues £655 million ($830.9 million), a 5% decline on a like-for-like basis or flat on a reported basis. This included an estimated 2% headwind from the conflict in the Middle East. The company added that the result had been primarily driven by an increase in Prestige cosmetics sales, but was partially offset by a decline in fragrance sales.

Across the company's Consumer Beauty division, which represents 35% of sales, it reported net revenues of £355 million ($450.7 million), a 4% decrease on a reported basis and 10% on a like-for-like basis, which included an estimated 1% headwind from the conflict in the Middle East. The company added that this was due to a decrease in mass fragrance and colour cosmetics sales.

Looking ahead, Coty expects revenues in Q4 2026 to slightly improve.

“Q3 marked an important step toward restoring consistent performance commensurate with Coty's outstanding assets and capabilities," commented Markus Strobel, Executive Chairman and Interim Chief Executive Officer.

"While the Q3 results were below our potential on an absolute basis, we were pleased to deliver profitability ahead of our guidance despite the disruption in our Middle East business late in the quarter. This was a welcome first step, as we begin to gradually strengthen our operational control and execution.

"We are methodically implementing the Coty.Curated strategic framework announced last quarter, centered on sharper priorities, more focused investments, improved execution, and increased support behind our core businesses.

"We are embedding this framework into our FY27 action plans for both divisions, including significantly reducing the number of smaller launches, lowering marketing asset production costs in part through broad-based AI deployment for our owned brands, while increasing consumer engagement spending, and working to simplify our operational model, all with the ultimate objective to grow our sell out and market share over time."

In March Coty had appointed five new independent directors as part of a comprehensive refreshment of its Board of Directors, collectively offering decades of expertise across prestige beauty, luxury and global consumer brands.