Key facts
- Coty's net revenue rose 1.3% to $1.27 billion in the fourth quarter.
- The company expects fiscal 2027 to be a transition year as it simplifies its business.
- A review of the consumer beauty division could result in the sale of brands such as CoverGirl and Rimmel.
- Coty appointed Soraya Benchikh as its new Chief Financial Officer.
Coty Inc. reported a surprise increase in fourth-quarter revenue, with net revenue rising 1.3% to $1.27 billion, surpassing analysts' expectations. The company attributed the growth to resilient demand for its fragrances and cosmetics, despite broader economic uncertainties and the impact of geopolitical conflicts.
Looking ahead, Coty has designated fiscal year 2027 as a "transition year" as it implements its "Coty. Curated." strategy. This initiative involves simplifying the business and conducting a strategic review of its consumer beauty division, which could lead to the divestiture of brands like CoverGirl and Rimmel. These changes, alongside cost-reduction programs, are intended to offset a projected sales decline in fiscal 2028 due to the early return of the Gucci Beauty license to Kering, and to support profit growth from fiscal 2029.
In the reported quarter, Coty's adjusted loss per share narrowed to 2 cents from 5 cents a year prior, though it was wider than the 1-cent loss anticipated by analysts. The company noted a roughly 1% impact from the Middle East conflict, which was less severe than previously forecast. For the current quarter, Coty anticipates a low- to mid-single-digit percentage decline in like-for-like revenue. The company also forecast first-quarter adjusted earnings per share between 11 and 13 cents, slightly below the 14 cents estimated by analysts. Separately, Coty announced the appointment of Soraya Benchikh, former finance chief of British American Tobacco, as its new CFO, succeeding Laurent Mercier.