Coty has reported a lacklustre start to its 2026 financial year as beauty sales at the Kylie Cosmetics-owner sank across the board.
Revenue in Q1 decreased by 6% to US$1.58bn on a reported basis, and 8% on a like-for-like basis.
This was dragged down by a 4% slump in prestige beauty revenue to $1bn, impacted by weakened demand for make-up and skin care sales during the quarter.
Net revenue for the prestige category was also impacted by Coty “rightsizing” retailer inventory levels to match demand in the prestige fragrance category.
Consumer beauty also decreased 9% to $507m following a downturn across most European markets and trade destocking in mass fragrances.
“Coty’s strategic progress is accelerating as we elevate Coty as a prestige beauty company with an emphasis on fragrances and scenting across price points, complemented by capabilities in prestige cosmetics and skin care,” said Sue Nabi, CEO of Coty.
“In line with our recent strategic announcements, over the coming years we will concentrate investment behind our portfolio brands with the greatest long-term potential, while also building and elevating our newly added licenses and brands.”
Revenue declines were reported across all of Coty’s major trading markets, as US sales declined 6% to $649.6m due to lower demand for consumer beauty and retailer rightsizing.
Europe, the Middle East and Africa’s (EMEA) 4% income decrease to $754.8m was attributed to lagging colour cosmetics sales in consumer beauty.
Asia Pacific saw the largest declines during the quarter, however, as revenues sank 9% to $172.8m amid market softness.
Despite lagging sales, the US beauty giant remains optimistic about its position for the second quarter of trading as it pivots its focus towards fragrances.
Nabi added: “Following recent changes, Coty’s underlying business trends are already improving, in line to slightly ahead of our expectations, particularly in prestige.
“In Q1, our US prestige fragrance sell-out grew by a mid-to-high single-digit percentage, in line with the market, and we expect the US prestige business to return to both sales and sell-out growth in Q2.”
Although Coty is shoring up its perfume offering in a bid to boost sales, the US giant is set to lose its beauty license for Gucci following L’Oréal’s acquisition of Kering Beauté in October.
The company will continue to operate Gucci Beauty under its current agreement, and stated in its Q1 update that it will focus on “optimising the brand during its remaining term”.
Alongside fragrances, Coty also recently launched a strategic review of its Consumer Beauty business to “compete more effectively”.
This involves a stronger focus on its colour cosmetics business, estimated to be worth US$1.2bn, which comprises brands CoverGirl, Rimmel London, Sally Hansen and Max Factor.
Coty has experienced a challenging year in 2025, having reported mixed trading throughout and also slashing 700 jobs in April as part of its ‘transformational’ overhaul.
The ‘All-in to Win’ programme, announced in 2020, aims to streamline organisational structure across Coty’s key operating markets.
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