Coty Reports Wider Losses Ahead of Transition Year
Coty's fiscal 2025/26 results show a net loss of USD 618 million, with full-year sales falling 5% to USD 5.8 billion
Coty, a US cosmetics and fragrance group, has reported wider losses for fiscal 2025/26, with a net loss of USD 618 million, compared to a USD 381 million loss a year earlier. The group's full-year sales fell 5% to USD 5.8 billion. However, the company's performance stabilized in the fourth quarter, with sales returning to growth and rising 1% in the three months ended in late June.
Financial Performance
The group's financial performance has been impacted by its restructuring efforts. Interim CEO Markus Strobel stated that the Q4 results provide early signs of stabilization, although the recovery will not be linear. The company is forecasting a transition year in fiscal 2027, as it strengthens its core business and continues to shape a simpler, more focused Coty.
Gucci Beauty License Transfer
In July, Coty announced that it would transfer the Gucci Beauty license back to Kering, the French luxury group that owns the Gucci brand, for approximately USD 400 million. Coty will continue to operate Gucci Beauty until June 30, 2027. Under the terms of the agreement, L'Oréal will subsequently hold the exclusive license for the Gucci Beauty brand for 50 years.
Strategic Review and Restructuring
Coty plans to use the proceeds from the transaction to reduce debt, invest in its core portfolio of prestige fragrances and beauty products, and streamline its organization. The company has also announced a strategic review of its mass-market cosmetics business, as part of a broader effort to refocus on fragrances. This includes the merger of its prestige and mass-market fragrance divisions. Coty also plans to continue reducing the number of product launches and cutting marketing production costs, partly through the use of artificial intelligence, while increasing investment in consumer engagement.
Leadership and Organization
Coty has announced the appointment of Soraya Benchikh as its incoming Chief Financial Officer (CFO), effective September 1, 2026. She will succeed Laurent Mercier. The appointment follows the new operating structure introduced by Coty, which includes a new commercial decision-making model and the consolidation of research and development and supply chain into a single function. The company's leadership and organization changes are aimed at supporting its transition and restructuring efforts.
