Coty Reports Sales Boost but Faces Challenges Ahead
Coty's latest financial report reveals a boost in sales, but the company is facing challenges with increased losses and a predicted decline in revenue due to the upcoming transfer of Gucci Beauty
Coty has announced its fourth-quarter revenue, which reached $1.27 billion, surpassing market expectations. However, the company's net loss more than doubled due to lower volumes, tariffs, and excess inventory. This news comes as Coty appoints a new Chief Financial Officer, Soraya Benchikh, who will take over the role from 1 September.
New Leadership and Financial Performance
The appointment of Benchikh follows changes to Coty's senior team and operating structure under its Coty.Curated strategy. Markus Strobel, Executive Chairman and Interim Chief Executive Officer, expressed confidence in Benchikh's ability to lead the company, citing her strong track record of financial and operational leadership. Benchikh replaces Laurent Mercier, who has held the role since February 2021.
The company's sales performance was a highlight, with net revenue increasing 1% in the three months to 30 June 2026, beating analysts' estimates. Foreign exchange provided a 3% benefit, while like-for-like revenue declined 1%. The prestige revenue segment rose 1% to $771.8 million, representing 61% of quarterly sales, while Consumer Beauty revenue also increased 1% to $497.4 million.
Segment Performance and Challenges
The following table summarizes the performance of Coty's segments:
| Segment | Reported Revenue | Like-for-Like Revenue |
|---|---|---|
| Prestige | $771.8 million | -1% |
| Consumer Beauty | $497.4 million | -3% |
Coty's reported net loss widened to $144.3 million, and its operating result moved from income to a loss. The company acknowledged that underlying demand for its brands continued to trail the wider market in both divisions.
Future Outlook and Strategies
Coty will continue operating Gucci Beauty until at least 30 June 2027 under its $400 million early-transition agreement with Kering. The company expects Gucci Beauty's departure to reduce revenue and profit sharply in FY28. In response, Coty plans to implement fixed-cost reductions and invest behind core brands and newer portfolio additions. The relaunch of Marc Jacobs Beauty is showing promising results, with online sell-out at Sephora ahead of targets. Distribution is due to expand into hundreds of Sephora stores in the US and travel retail from September.
The company forecasts a low- to mid-single-digit percentage drop in like-for-like revenue for the first quarter of FY27, with adjusted EBITDA down by a low-teens percentage. Despite the challenges ahead, Coty remains focused on closing the gap between shipments to retailers and consumer sell-out, with Strobel emphasizing the importance of improving sell-out performance across the organisation.
