Coty Interim CEO Markus Strobel (pictured above) has unveiled a new business turnaround strategy, ‘Coty. Curated’, after delivering underwhelming financial results for Q2 fiscal year 2026.
The executive revealed the strategy while presenting Coty’s latest earnings, with plans to turn the tide on the beauty giant’s “disappointing” performance.
For Q2 fiscal year 2026 – the three months ending 31 December 2025 – Coty delivered net revenue of US$1.68bn – a 1% increase on a reported basis and included a 4% benefit from foreign exchange (FX).
However, on a like-for-like (LFL) basis, net revenue declined 3%.
"In my first month in the role, having visited our largest markets and key sites, it is very clear to me that Coty has many top-notch assets and competitive advantages,” said Strobel, who was appointed Interim CEO in December after taking over from Sue Nabi.
“Highly attractive brands, best-in-class fragrance innovation capabilities, a vertically integrated business model, and a creative, entrepreneurial organisation.
“At the same time, our financial performance over the past year-and-a-half has been disappointing, and our current share price reflects that reality.
“Both things are true: Coty has outstanding assets and capabilities, yet we have not been delivering at the level we should.”
Coty’s prestige division’s net revenue reached $1.13bn during Q2 fiscal year 2026, increasing 2% on a reported basis and declining 2% on a LFL basis.
Consumer beauty net revenue was reported as $545m during this time – a 2% decrease on a reported basis and 6% on a LFL basis.
Prestige beauty represented 68% of the company's total sales, and consumer beauty 32%.
Burberry and Kylie Cosmetics led the prestige make-up category with mid-single-digit percentage growth.
Skin care brands Lancaster and Philosophy posted double-digit percentage growth.
Adjusted EBITDA declined 15% year-on-year, with gross margin decreasing from 64.5% to 63.8%.
Coty’s Americas sales declined by 3% on a LFL basis to $624.5m, while EMEA sales declined by 4% and Asia-Pacific by 2%.
During this period, Coty also sold its remaining 25.8% stake in Wella to KKR.
Under the terms of the transaction, the company received $750m in upfront cash.
It will have the potential to receive proceeds from a further sale or an initial public offering (IPO) of the business, after KKR’s preferred return has been met.
Coty used the vast majority of the Wella upfront cash proceeds related to this transaction to pay down its long-term debt.
Boss Bottled Beyond campaign imagery
What is ‘Coty. Curated’ and can the strategy work?
‘Coty. Curated’ is a turnaround strategy which aims to sharpen the business’ priorities and boost sales.
It is similar in its mission to the Estée Lauder Companies ‘Beauty Reimagined’ transformation plan, which aims to get the beauty giant back to profitability after several rocky quarters.
“To step-change our performance and channel our strengths, we are initiating our ‘Coty. Curated.’ strategic framework, encompassing sharper priorities, more focused investments, improved execution and increased support behind our core businesses,” said Strobel.
“These actions are anchored in consumer demand and a relentless focus on sell-out and market share.
“In parallel, we are continuing our portfolio review to identify opportunities to unlock shareholder value in both the near- and long-term.
“Complemented by other value-driving opportunities, such as our recent divestiture of our remaining stake in Wella at the end of CY25, delivering on our commitment.
“With greater focus and discipline, I believe Coty is well positioned to deliver consistent, profitable growth and realise its full potential."
To boost prestige beauty going forward, Coty said the fragrance category will play a big part.
The company will continue to “amplify” the autumn 2025 blockbuster Boss Bottled Beyond fragrance launch globally.
It is already the number two male fragrance launch in its category, claimed the company.
This Boss push will take place alongside the relaunch and distribution extension of the Hugo Boss brand in the US, where it has already reached 90 basis points of market share.
Kylie Cosmetics' Cosmic Intense fragrance
Coty will also keep building on the “strong momentum” of Kylie Jenner’s latest fragrance launch under her beauty brand Kylie Cosmetics.
The company said Cosmic Intense is performing “well ahead of expectations” in the US and double the levels of the prior year's fragrance launch.
Other key upcoming moments which Coty claims will help boost the division include launching a “key” female fragrance initiative under Calvin Klein in the coming weeks, and the unveiling of Makeup under Marc Jacobs Beauty in CY26.
Coty said there will also be a Swarovski fragrance targeted to launch in CY27.
Coty’s turnaround plans for consumer beauty includes focusing investments behind core cosmetics brands and franchises under CoverGirl and Rimmel London, with early incremental improvements in sell-out.
Plus, continuing to “globally expand and amplify” Adidas fragrances, led by the Adidas Vibes scenting collection.
This strategy will focus on streamlining and platforming FY27 innovation pipelines to deliver higher productivity and margins.
Doubling down on procurement savings initiatives across various categories, including merchandising and media.
Plus, refining the equity and positioning of all colour cosmetics brands to ensure a clear point of view and target market.
Coty also confirmed in the earnings announcement that it has terminated its license with vegan skin care brand Orveda.
Rimmel London's most recent Thrill Seeker campaign
Coty changes its outlook
Given “the complex beauty market backdrop and Coty's leadership transition”, Strobel said the company is withdrawing its prior FY26 guidance for EBITDA and free cash flow, and is providing guidance solely for Q3.
Coty expects LFL Q3 revenues to decline by a mid-single-digit percentage, primarily due to “weakening” in consumer beauty sales trends.
In prestige, Coty estimates the fragrance market will grow at a low‑to‑mid‑single‑digit rate.
In consumer beauty, Coty estimates the mass beauty category will be flattish to up low single‑digits.
Strobel joined Coty after a 33-year career in beauty and grooming at Procter & Gamble (P&G), where he most recently served as President of P&G’s Global Skin & Personal Care business.