Coty Inc. Reports Strong FY25 Results: Robust Fragrance Growth and Strategic Outlook for FY26

Key Takeaways

Coty Inc. reported a 4% decline in net revenue for FY25, totaling $5.89 billion, affected by foreign exchange fluctuations.
The company anticipates a gradual sales improvement in FY26, with a focus on fragrances and strategic growth initiatives.
CEO Sue Nabi emphasizes the emphasis on expanding Coty’s leadership in global fragrances and sustainable profitability.

Financial Performance Overview

Coty Inc. has released its financial results for fiscal year 2025, reporting net revenue of $5,892.9 million, a 4% decrease compared to the previous year. This decline is partly attributed to a 1% negative impact from foreign exchange. On a like-for-like (LFL) basis, net revenue fell by 2%. The prestige segment, which comprises 65% of total sales, achieved net revenue of $3,820.2 million, marking a 1% decrease on a reported basis but a slight positive change in LFL terms, with low single-digit growth in sell-out.

Conversely, consumer beauty net revenue, representing 35% of total sales, declined by 8% as reported and 5% on an LFL basis, totaling $2,072.7 million. For the quarter ending June 30, 2025, Coty reported quarterly net revenue of $1,252.4 million, reflecting an 8% decline on a reported basis and a 9% drop on an LFL basis.

Key Financial Metrics

Key financial metrics for FY25 include:
– Adjusted EBITDA: $1,082 million (18.4% margin), up by 60 basis points.
– Adjusted EPS: $0.50, excluding equity swaps.
– Free cash flow: $280 million.
– Fragrance sales grew by 9% in Ultra-Premium, 2% in Prestige, and 8% in Consumer Beauty.

Future Projections

Looking ahead to FY26, Coty expects a gradual recovery in sales, forecasting LFL declines of 6-8% in Q1 and 3-5% in Q2, followed by growth in the latter half of the year. This expected rebound is anticipated to be propelled by significant product launches, expansion into new markets, and favorable annual comparisons. Additionally, Coty projects a small positive impact from foreign exchange in the first half of FY26.

Strategic Vision and Focus

CEO Sue Nabi outlined Coty’s strategic focus on enhancing its footprint in global fragrances and driving profitable growth. Nabi indicated that Q4 results align with expectations as Coty prepares for a strong product launch calendar in FY26.

Coty aims to prioritize its established leadership and capabilities in global fragrances, which currently generate over 60% of the company’s revenues. The brand’s aim includes leveraging its competitive advantages in R&D, manufacturing, and marketing to bolster growth in this segment.

Nabi noted that fragrances, supported by strong consumer demand and loyalty, remain a strategically advantageous category. Alongside an emphasis on fragrance innovation, Coty is committed to expanding its skincare business while monitoring investment levels for improved profitability in mass color cosmetics.

In summary, after four years of significant growth, Coty is well-positioned for sustainable, multi-year profitability, driven by its strong brand portfolio, operational scale, and commitment to achieving a robust return on investment.

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