Coty Ends Fiscal Year on Positive Sales Note Despite Gucci License Loss, Taps New CFO for Next Growth Phase
Despite losing its crown jewel Gucci Beauty license, Coty ended the fiscal year on a positive note, topping Wall Street revenue estimates.
Coty’s net revenue rose 1 percent to $1.26 billion in the three months ended June 30. Analysts had forecast $1.19 billion.
Within that, prestige net revenues rose 1 percent to $771.8 million, representing 61 percent of the company’s total sales. Consumer beauty net revenues also increased 1 percent to $497.4 million.
Nevertheless, the group reported a net loss of $144.3 million, compared to a net loss of $72.1 million in the prior year. Adjusted losses per share narrowed to 2 cents, but were greater than Wall Street forecasts for a 1-cent loss.
Markus Strobel, executive chairman and interim chief executive officer, said: “We were pleased to return to reported sales growth, with Q4 sales up 1 percent year-over-year and a significant sequential improvement in our like-for-like trends to down 1 percent, despite incurring an estimated 1 percent headwind to sales from the Middle East conflict. It’s encouraging to see closer alignment between our sell-in and sell-out. However, we are not content with our sell-out performance, which remains below market levels in both divisions, and steadily closing that gap remains a clear priority across the organization.”
While the company did not provide full-year guidance for 2027, he alluded to the future post-Gucci.
In July, it was revealed that Gucci and L’Oréal had entered into a 50-year exclusive beauty license, one year ahead of schedule, as the Italian brand’s fragrance and beauty license was meant to expire with Coty Inc. on June 30, 2028.
“While the Gucci Beauty license exit will result in a step-down in sales and profit in FY28, we are developing plans to help moderate the impact,” Strobel continued. “These plans include accelerating our core brands; maximizing the contribution from new portfolio additions, including makeup under Marc Jacobs Beauty and fragrances under Swarovski, Etro, and Marni; and lowering our cost structure through a significant fixed cost reduction program. These actions are designed to mitigate the FY28 impact and position Coty to accelerate growth across our core portfolio and drive profit expansion in FY29 and beyond,” Strobel said.
The earnings came as Coty tapped Soraya Benchikh as chief financial officer, effective Sept. 1, succeeding longtime CFO Laurent Mercier.
The appointment follows the new operating structure Coty put in place on July 2, which brought commercial decision-making closer to the markets the company serves and combined research and development and supply chain into a single function.
Strobel said: “Soraya is a seasoned global executive with a strong track record of financial and operational leadership, and she is the right leader for Coty’s next phase. As we welcome her to Coty, I would like to sincerely thank Laurent for his leadership in strengthening Coty’s financial foundation over the past five years. He shaped a better finance organization, built greater financial discipline, and created a clear financial roadmap.”
Benchikh most recently served as CFO of British American Tobacco, after spending nearly four years at Diageo.
Benchikh said: “Coty has one of the strongest portfolios in global beauty, and Laurent leaves the finance function in great shape. I’m joining at a pivotal moment in Coty’s transformation, with a clear strategy and a real opportunity to accelerate it alongside Markus and the team. My focus will be strengthening the balance sheet, sharpening capital allocation, and helping drive the next phase of sustained value creation.”
