Coty Revenue Beats Estimates as Beauty Demand Holds Firm

Coty reported an unexpected increase in fourth-quarter revenue as resilient demand for fragrances and cosmetics helped the beauty company outperform Wall Street expectations. The company also announced the appointment of former British American Tobacco executive Soraya Benchikh as its new chief financial officer.

Despite the stronger-than-expected Coty revenue results, shares fell about 9% in extended trading after the company posted a larger quarterly loss than analysts anticipated. Coty described fiscal 2027 as a “transition year” as it moves forward with its “Coty. Curated.” strategy aimed at simplifying operations and improving efficiency.

As part of the strategy, Coty is reviewing its consumer beauty business, a process expected to conclude by the end of the year. The review could potentially result in the sale of well-known brands including CoverGirl and Rimmel.

Benchikh, who previously served as finance chief at British American Tobacco and president of Europe at Diageo, will replace Laurent Mercier after roughly five years as Coty CFO. The leadership change forms part of organizational restructuring announced in July.

Coty is also implementing a cost-reduction program designed to strengthen the business and help offset the expected fiscal 2028 sales impact from the early return of its Gucci Beauty license to luxury group Kering.

For the quarter ended June 30, Coty’s net revenue increased 1.3% to $1.27 billion. Analysts surveyed by LSEG had expected revenue to fall 4.6%. The company said beauty demand remained resilient, particularly across fragrances and cosmetics, although consumers have become more selective about purchases.

Coty also reported that the Middle East conflict reduced sales by approximately 1%, below its previous forecast for a 2% to 3% impact.

Adjusted loss per share improved to 2 cents from 5 cents a year earlier but missed analysts’ expectation for a 1-cent loss.

Coty did not issue full-year guidance. However, it expects like-for-like revenue in the current quarter to decline by a low- to mid-single-digit percentage, an improvement from the 8% decline recorded a year earlier.