Despite the continued growth in fragrance, Coty’s results for the second quarter of fiscal year 2025 failed to meet the group’s expectations. On Monday, the beauty conglomerate reported a 3% decline in net revenue for its second quarter to $1.6 billion. Coty CEO Sue Nabi said the conglomerate — which owns the likes of designer beauty brands like Gucci and Marc Jacobs, as well as Kylie Cosmetics — remains optimistic. And she called 2025 a “transition year.”
“While the complex backdrop may weigh on trends in the near term, we are confident in our ability to continue to deliver strong margin expansion, and with exciting brand initiatives and distribution opportunities on track for fiscal year 2026 and beyond,” said Nabi during a prepared set of remarks released on Monday.
Like Estée Lauder, Coty attributed declines in revenue to a difficult travel retail market in Asia. The company reported an 11% decline in net revenue in Asia Pacific in the second quarter. Net revenue fell in the Americas, as well, by 7%, but grew in EMEA by 2%.
Coty remains confident in fragrance, which accounts for 60% of its revenue. The company reported that Marc Jacobs Daisy Wild, a flanker of the Daisy franchise, was the No. 1 launch in the U.K. in the calendar year 2024. Nabi stated that Hugo Boss has become its largest brand and the No. 2 male fragrance brand in Europe.
But despite an estimated single-digit growth in the sell-out rate of Coty’s prestige fragrances, net revenue for its overall prestige sector fell 1% in the second quarter. Coty’s consumer beauty sector saw net revenue decrease by 8%, largely due to a decline in color cosmetics and body care, despite growth in mass fragrances.
Coty is also preparing to shift its supply chain to account for potential tariffs on imported goods to the U.S. following new policies from President Donald Trump.
“We are already making adjustments in our product flows and sourcing, including having some extra inventory on hand in the U.S. and shifting more of our mass fragrance production to our North Carolina plant,” said CFO Laurent Mercier on Monday’s webcast.
Coty will host a live Q&A session on its second-quarter 2025 earnings on Tuesday.
