Beauty powerhouse Coty this week reported a -1% (-7% like-for-like) decline in third-quarter net revenue year-on-year to US$1.28 billion for the period ended 31 March. War in the Middle East weighed on performance, contributing to an estimated 1.4% of the like-for-like decline.
Adjusted EBITDA for the quarter declined -38% year-on-year to US$127 million, with margin contracting by -580 basis points to 9.9%.
For the first nine months of fiscal 2026, net revenue declined -2% year-on-year (-6% like-for-like) to US$4.54 billion, including a +4% foreign exchange benefit.
“Q3 marked an important step toward restoring consistent performance commensurate with Coty’s outstanding assets and capabilities,” said Coty Executive Chairman and Interim Chief Executive Officer Markus Strobel.
“While the Q3 results were below our potential on an absolute basis, we were pleased to deliver profitability ahead of our guidance despite the disruption in our Middle East business late in the quarter. This was a welcome first step, as we begin to gradually strengthen our operational control and execution.”
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Coty Chief Financial Officer Laurent Mercier on the Middle East crisisPrestige net revenue for Q3, which accounted for 65% of group sales, remained flat year-on-year on a reported basis (-5% a like-for-like) at US$830.9 million. Consumer Beauty revenue fell -4% on a reported basis (-10% like-for-like) to US$450.7 million.
Regional performance was mixed, though strong travel retail performance helped partially offset an Americas net revenue decline of -4% year-on-year to US$510.4 million.
In particular, the company said Calvin Klein Euphoria Elixirs had delivered early positive results in Europe and Americas travel retail.
EMEA third-quarter revenue decreased -2% to fall below US$600 million, primarily due to lower sales in the Middle East alongside softer year-on-year performance in France and Central and Eastern Europe.
Asia Pacific was the strongest-performing region in the quarter, with reported revenue increasing +9% to US$173.6 million over 2025. Coty attributed the growth to stronger sales in China, South Korea and Japan, alongside continued momentum in travel retail.
Looking ahead, Coty management expects fourth-quarter like-for-like revenue to decline year-on-year by a mid-single-digit percentage, reflecting a sequential improvement from third-quarter trends. The company said the Middle East conflict is expected to create a further -2% to -3% sales headwind in Q4.
Importantly, the company has begun the implementation of the Coty.Curated framework for growth. The initiative will simplify the portfolio, and sharpen focus on core brands and markets. It will also identify savings opportunities to support investment behind consumer engagement and profitability.
Strobel commented, “We are methodically implementing the Coty.Curated strategic framework announced last quarter, centred on sharper priorities, more focused investments, improved execution and increased support behind our core businesses.
“We are embedding this framework into our FY27 action plans for both divisions, including significantly reducing the number of smaller launches, lowering marketing asset production costs in part through broad-based AI deployment for our owned brands, while increasing consumer engagement spending, and working to simplify our operational model, all with the ultimate objective to grow our sell-out and market share over time.
“As we near the conclusion of our strategic planning and portfolio assessment, to be validated with our Board, including our new independent directors, we expect to share more details in the coming quarters.”
He added, “At the same time, I remain confident in Coty’s position as a leading fragrance player, underpinned by our multiple iconic brands, and targeted presence in other beauty categories, including cosmetics, skincare and bodycare.
“We believe stronger, more focused execution across our portfolio will enable us to deliver consistent, profitable growth, advance our deleveraging agenda, and further strengthen our balance sheet.” ✈
