Coty blames revenue decrease on economic instability

Coty has released its Q3 financial report, revealing a decline in revenue and sales due to macroeconomic uncertainties. The company also released an “attack plan” for innovation, detailing how it aims to get back on track and grow its consumer beauty products. The plan includes utilizing new technologies, expanding on previous product launches, and reorganizing its business structure.  

For the last nine months, net revenue decreased by 2%, reaching US$4.64 billion. The Consumer Beauty segment decreased by 7%, reaching US$1.58 billion, accounting for 24% of the company’s total sales. 

Coty attributes the decrease to an “uncertain market backdrop and foreign exchange headwinds.” For 2026, the company has made a “robust plan to fuel operational and financial improvement.”

“Across economic cycles, beauty has remained resilient for decades. Even in this challenging landscape, we have strengthened our strategic, operational, and financial fundamentals, driving margin expansion, stronger cash flow generation, and substantial deleveraging over the past four years,” says Sue Nabi, Coty’s CEO. 

“While we are not satisfied with our net revenue performance, Coty’s strong fundamentals, coupled with our multi-pronged attack plan for accelerating innovation, distribution, and efficiencies, give us confidence for the years ahead.”

Coty says trends are shifting between cosmetics and fragrances.Transitioning through 2025

Coty calls this year a transition year due to “a slowing fragrance market, lapping a blockbuster innovation year, and a reduction in elevated retailer inventory in the US.” 

To create a “healthy baseline” for growth, Coty aims to focus on sell-in and sell-out strategies in fiscal 2026 and adjust its business operations to respond to changing market trends in consumer beauty. 

The American multinational beauty company says trends are shifting between cosmetics and fragrances, and it is considering its different strengths. 

“Our goal is to strengthen our cosmetics business while making it more profitable, while in parallel over-driving our mass fragrances business where we have leadership and a strong margin profile,” says Coty. 

The company has adopted changes such as an updated organizational structure to drive change and execution faster. It also implemented new leadership in the US, responding to a slowed-down market, and a cost-saving program to protect profits and losses while accelerating its business operations. 

“We are [now] more strongly positioned to navigate the current complex dynamics, including tariffs and broader macroeconomic uncertainty, supported by the strategic, operational, and financial fundamentals which we have strengthened over the last four years, even in the context of the highly constrained profit and losses,” says Nabi.

Economic cycles in beauty

Coty says that beauty remains a strong category through uncertain economic times since consumers still seek personal indulgence during difficult periods. 

The company expects fragrances, both fine and mass, to remain strong as the product category continues to grow — even as the US beauty market declines.

For 2026, the company has implemented a fragrance innovations program for its consumer beauty segment. It recently launched its own brand collections and collaborated with fragrance lines. It also introduced technologies for its cosmetics brands, mainly for nail products and mascaras. Coty says its sales focus is through e-commerce and TikTok Shop.

Nabi says that Coty has the levers to protect its profitability and cash flow in various macroeconomic scenarios.