The American cosmetics giant, Coty, revealed a decrease in its first trimester results for the fiscal year 2026 on Wednesday, November 5th, but indicated anticipations of “a return to expansion in the latter half of 2026.” The enterprise is depending on persistent vigorous demand within the fragrance sector, aiming to further enhance its leadership position.
During the initial trimester (July to September 2025), the net profit dropped by 19% to USD 64.6 million. Turnover diminished by 6% to USD 1.58 billion.
Revenue receded across all geographies: dropping 6% in the Americas (both on a reported and like-for-like basis), receding 4% in the EMEA region (-9% on a like-for-like basis), and declining 9% in the Asia-Pacific region (both on a reported and like-for-like basis).
“We anticipate Q2 sales to be toward the more optimistic spectrum of our prior guidance, exhibiting a return to revenue and profit elevation throughout the concluding half of FY26,” the corporation stated in a press announcement.
“Coty’s strategic advancement is quickening as we elevate Coty into a Prestige beauty firm, emphasizing scents and perfumery at diverse price tiers, while supplementing prestige cosmetics and skincare proficiencies,” communicated Sue Nabi, Chief Executive Officer of Coty.
In September, Coty revealed a strategical review commencement of its consumer makeup division, intending to pivot towards fragrances by unifying its “prestige” and “mass market” fragrance divisions.
Within the “ultra-premium” bracket, referring to perfumes retailed exceeding 150 euros (Jil Sander, Chloé, Infiniment Coty, Burberry, Gucci, etc.), Coty’s revenues surged “by 17%,” Chief Financial Director Laurent Mercier conveyed to AFP.
End of Gucci license
Nevertheless, Coty is slated to forfeit the Gucci license as Kering—the luxury conglomerate overseeing the Italian label—has agreed to divest its beauty segment to the globe’s foremost cosmetics establishment, L’Oréal of France.
This arrangement bestows upon L’Oréal entitlements to engage in an “exclusive half-century licensing pact concerning the conception, formulation, and dissemination of Gucci fragrance and beauty offerings,” taking effect subsequent to the conclusion of Coty’s extant license in 2028.
“Coty shall continue to operate Gucci Beauty under the existing accord, currently prioritizing optimizing the brand during the remainder of its tenure,” added the group.
“Even excluding the Gucci license, Coty endures as the world’s third-largest player in prestige fragrances—a position we plan to bolster by committing resources to our flagship trademarks and amplifying our catalog through novel licenses,” Mr. Mercier emphasized.
