Table of Contents
Coty, the global beauty group led by Algerian-born executive Sue Nabi, posted a net loss of $381 million for the fiscal year ended June 30, 2025, as currency swings and a sluggish consumer market weighed on results.
Profit swings to loss on weak demand
The company’s annual report showed a sharp reversal from a $76.2 million profit a year earlier, with revenue down 4 percent to $5.89 billion. On a like-for-like basis, sales slipped 2 percent, reflecting pressure from weak demand and continued currency headwinds.
Its prestige business, which accounts for nearly two-thirds of sales, held up relatively well. Revenue came in at $3.82 billion, down 1 percent on a reported basis but slightly higher on a like-for-like measure, supported by modest growth in prestige fragrances.
The consumer beauty unit, which makes up the rest of the business, struggled. Sales dropped 8 percent on a reported basis and 5 percent like-for-like to $2.07 billion, hurt by softness in mass-market cosmetics.
Coty navigates ‘reset year’ in 2025
Operating income for the segment fell 56 percent to $241.1 million, with margins narrowing to 4.1 percent. Companywide adjusted operating income was more stable at $852.9 million, while margins improved to 14.5 percent thanks to $140 million in cost savings.
Earnings per share reflected the pressure: reported EPS fell to a loss of $0.44, affected by equity swap impacts, while adjusted EPS declined to $0.22 from $0.37 a year earlier. Adjusted EBITDA slipped 1 percent to $1.08 billion, though the margin edged up to 18.4 percent. Free cash flow for the year was $277.6 million.
Nabi described 2025 as a “reset year,” marked by weak U.S. demand and retailer destocking, but said Coty is entering 2026 with clearer priorities. New fragrance launches — including BOSS Bottled Beyond, Gucci Flora Gorgeous Gardenia Intense, and Davidoff Cool Elixir — are expected to support growth, alongside affordable fragrance mists aimed at budget-conscious shoppers. The company also plans to gradually expand in skincare and cosmetics.
Balance sheet shows asset decline
Since taking the helm in 2019, Nabi has steered Coty toward fragrances, color cosmetics, and skincare, reshaping the portfolio while implementing efficiency programs. She holds a 3.7 percent stake, underscoring her personal commitment to its turnaround. Fragrances, which already generate more than 60 percent of sales, remain the centerpiece of Coty’s strategy.
The company’s balance sheet showed total assets of $11.91 billion, down from $12.08 billion, and equity of $3.72 billion, down from $4.01 billion. Even so, Coty said it expects gradual improvements in fiscal 2026, supported by blockbuster fragrance launches, growing demand for fragrance mists, a shift in U.S. production, and wider use of AI tools across the business.
