Coty unveils new growth strategy under interim CEO following 'disappointing' trading

Coty has reported a 1% increase in revenue for the second quarter ended 31 December 2025 and announced a new strategic framework aimed at driving future growth and long-term business success.

Second-quarter performance was broadly in line with expectations, with net revenue of $1.67 billion. On a like-for-like basis, however, net revenue declined 3%.

Prestige net revenue totalled $1.13 billion, representing 68% of total sales. Prestige revenue increased 2% on a reported basis but declined 2% on a LFL basis.

The segment benefitted from mid-single-digit percentage growth in prestige makeup, led by Burberry and Kylie Cosmetics, and double-digit percentage growth in prestige skincare, driven by Lancaster and Philosophy.

Meanwhile, consumer beauty net revenue was $545 million, accounting for 32% of total sales. Revenue declined 2% on a reported basis and 6% on a LFL basis.

The reported decline reflected a mid-single-digit percentage decrease in colour cosmetics and low-single-digit percentage declines in bodycare and mass fragrance, partially offset by double-digit growth in mass skincare.

Reported operating income for the quarter was $148.2 million, down from $268.2 million in the prior-year period, resulting in a reported operating margin of 8.8%.

For the six months ending 31 December, compared with the same period in 2024, net revenue was $3.25 billion, down 3% on a reported basis and 6% on a LFL basis.

The trading update comes after Markus Strobel was appointed as Executive Chairman and Interim Chief Executive Officer, replacing Sue Nabi, who exited the business in December after more than five years in the role.

Strobel joined Coty after a 33-year career at Procter & Gamble, where he most recently served as President of P&G’s Global Skin & Personal Care business, overseeing a multi-billion-dollar portfolio of more than 12 global brands.

Looking ahead, citing the complex beauty market backdrop and the leadership transition, Coty expects LFL revenue in the third quarter to decline by a mid-single-digit percentage, due to "weakening trends in consumer beauty".

In prestige, Coty estimates the fragrance market will grow at a low-to-mid-single-digit rate, consistent with second-quarter levels and in line with the broader beauty market.

In consumer beauty, the company expects the mass beauty category to be roughly flat to low single-digit growth. It comes as Coty begins to implement a performance improvement plan for its colour cosmetics business.

Commenting on the results, Strobel said: "I'm truly excited to join Coty at this pivotal moment. In my first month in the role, having visited our largest markets and key sites, it’s very clear to me that Coty has many top-notch assets and competitive advantages: highly attractive brands, best-in-class fragrance innovation capabilities, a vertically integrated business model, and a creative, entrepreneurial organisation.

"At the same time, our financial performance over the past year and a half has been disappointing, and our current share price reflects that reality. Both things are true: Coty has outstanding assets and capabilities, yet we have not been delivering at the level we should."

To leverage its strengths, Coty is initiating 'Coty. Curated.', a new strategic framework that aims to establish clearer priorities, focus investments, improve execution, and increase support for its core businesses.

The company is also continuing to review its portfolio to identify opportunities to unlock shareholder value, alongside other potential value-driving initiatives.

Strobel added: "With greater focus and discipline, I believe Coty is well positioned to deliver consistent, profitable growth and realise its full potential."