Coty posts $1.55 billion first-quarter revenue as declines narrow

Coty reported net revenue of $1.55 billion for the first quarter of fiscal 2027, ended 30 September, a decline of 1 percent from the prior year. The group said the result was ahead of expectations on sales, adjusted EBITDA and earnings per share.

Adjusted net income rose to $146.1 million from $106 million a year earlier. Markus Strobel, executive chairman and interim chief executive officer, credited the focus of Coty.Curated, alongside what he called a significant improvement in free cash flow.

Prestige net revenue fell 1 percent to $1.05 billion, while consumer beauty decreased 2 percent to $496.8 million, making the unit under review the weaker of the two divisions this quarter. Like-for-like sales declined 2 percent, broadly matching the fourth quarter and improving on the 6 percent and 4 percent falls of the first and second halves of fiscal 2026.

Strobel pointed to improvement in key markets including the United States, Asia-Pacific and Latin America. Yet he tempered the tone: "While our progress in the first quarter is encouraging, we have more work to do to translate green shoots into a broad-based recovery," he said.

Coty previously announced a strategic review of its consumer business, and Strobel said the company remains committed to completing it by the end of calendar 2026, the next marker for the review. Alongside the review, Coty is designing its organisation and cost structure to improve execution.

A transition year, by design

Strobel said the new structure will prioritise reinvestment behind the group's brands. He listed Coty's strengths as a portfolio of leading brands, strong category positions and a differentiated end-to-end global platform. The recovery, he cautioned, will be uneven.

"As we've previously shared, FY27 will be a transition year," Strobel said, adding that implementation will take time. Coty is presenting fiscal 2027 as a rebuilding period rather than one in which it expects to break sharply upward.

Coty has not said what the review will conclude.

Strobel described the like-for-like trend as a narrowing decline rather than a turn. The company has not published a growth target for the rest of fiscal 2027 in this announcement, leaving the strategic review as the main marker of direction.

The Marc Jacobs extension

The results followed a deal on Tuesday in which WHP Global and G-III Apparel Group, the new owners of Marc Jacobs, signed a beauty licence extension with Coty running 40 years, the headline length when we covered the agreement. The partnership began in 2003.

When we covered the Marc Jacobs Beauty licence extension, the headline was its 40-year length. Strobel now adds that Marc Jacobs fragrances rank among the top 10 to 15 prestige female fragrances across the U.S., U.K., Canada and Australia.

The recent launch of Marc Jacobs Beauty makeup is off to a strong start across those markets, according to Strobel. The multi-decade agreement, he said, gives Coty a platform to build on that momentum and improves the long-term visibility of its prestige portfolio.

"This extension is also a powerful testament to Coty's position as a partner of choice for the world's leading luxury fashion and lifestyle brands," Strobel said. Coty has built multiple fragrances for Marc Jacobs since the partnership began.

Holding prestige nearly flat while consumer beauty slipped further is the backdrop to a review of the weaker unit.

Coty has set out its calendar 2026 deadline for the review but no later date for results.

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Images: Coty