On February 11, Coty Group released its financial results for the first half of fiscal year 2025 and the second quarter ending December 31, 2024. According to the report, Coty’s net revenue for the first half of fiscal year 2025 was $3.341 billion, down 1% year-on-year. Operating income stood at $506 million, a 17% increase compared to the previous year, and the operating margin was 15.1%, expanding by 220 basis points. Adjusted operating income reached $637 million, up 4% year-on-year, with an adjusted operating margin of 19.1%, an increase of 90 basis points.
For the second quarter of fiscal year 2025, Coty’s net revenue amounted to $1.67 billion, a 3% decline compared to the same period last year. Operating income was $268 million, up 13%, with an operating margin expanding by 240 basis points to 16.1%. Adjusted operating income was $334 million, an 8% increase, with an adjusted operating margin of 20.0%, up 210 basis points year-on-year.
It is worth noting that for fiscal year 2024, Coty reported a net revenue of $6.118 billion, a 10% increase year-on-year, with comparable growth of 11%. This marks Coty’s fourth consecutive year of performance growth. In the first quarter of fiscal year 2025, Coty achieved a net revenue of $1.671 billion, a 4.5% year-on-year increase. However, the results for the second quarter of fiscal year 2025 represent the first decline in performance in nearly five years.
By segment, Coty’s Prestige division reported net revenue of $2.23 billion for the first half of fiscal year 2025, accounting for 67% of Coty’s total sales, a 2% year-on-year increase. Operating income was $463 million, compared to $422 million in the previous year, and adjusted operating income was $539 million, up from $499 million the previous year. The Consumer Beauty division, which includes brands like Covergirl, Max Factor, and Rimmel, saw net revenue of $1.11 billion, accounting for 33% of total sales, a 6% decline year-on-year. Operating income for this division was $78 million, down from $92 million the previous year, and adjusted operating income was $97.6 million, compared to $112 million the year before.
For the second quarter of fiscal year 2025, Prestige net revenue was $1.116 billion, accounting for 67% of total sales, a 1% year-on-year decrease. Consumer Beauty net revenue for the quarter was $553.8 million, making up 33% of total sales, an 8% year-on-year decline.
Regarding the growth performance of the Prestige division in the first half of fiscal year 2025, Coty’s financial report indicated that this was primarily driven by Europe, the Middle East, and Latin America, partially offsetting weaknesses in mainland China, Australia, and the Asia travel retail channel, as well as a 1% negative impact from foreign exchange and a 1% drag from the Lacoste licensing divestiture. The decline in the second-quarter Prestige division net revenue was mainly due to a year-on-year drop in the Asia Pacific region, especially in mainland China and the Asia travel retail channels, though growth in Europe and the Middle East partially mitigated these negative effects.
For the Consumer Beauty division, the decline in net revenue for both the first half of fiscal year 2025 and the second quarter was influenced by the negative impact of foreign exchange, as well as declines in body care and color cosmetics revenue. However, growth in mass fragrance and mass skincare partially offset these declines. Additionally, the overall mass beauty market was sluggish during this period, including a downturn in the U.S. market, with Coty’s mass beauty sales further impacted by pressures from major retailers.
By region, net revenue for the Americas in the first half of fiscal year 2025 was $1.332 billion, accounting for 40% of total sales, a 5% year-on-year decrease, including a 5% negative impact from foreign exchange. The EMEA (Europe, Middle East, and Africa) region posted net revenue of $1.627 billion, accounting for 49% of total sales, a 4% year-on-year increase, with a 1% positive impact from foreign exchange and a 1% drag from the Lacoste licensing divestiture. The EMEA region remains Coty’s largest contributor to performance and the only market to report growth.
In addition, the Asia Pacific region saw net revenue of $381.7 million for the first half of fiscal year 2025, accounting for 11% of total sales, a decline of 8% year-on-year. In the second quarter of fiscal year 2025, net revenue in the Asia Pacific region dropped 11% to $191.5 million. The decline in this region was attributed to challenging dynamics in the mainland China market and the regional travel retail channel, particularly affecting the Prestige division. However, these negative impacts were partially offset by growth in Southeast Asia and Hong Kong.
Sue Nabi, Coty Group’s CEO, commented on the company’s performance, stating, “In fact, our fragrance portfolio continues to perform strongly, with both Prestige and mass fragrance sales increasing in the first half of fiscal year 2025. Driven by Hugo Boss, Burberry, Chloe, and Marc Jacobs, our Prestige fragrance sales grew by a high single-digit percentage in the first half. While the uncertain market environment may affect trends in the short term, our financial position is stronger than it has been in the past four years, and we will benefit greatly from healthier leverage levels and cash generation.”
“We look forward to exciting brand plans and distribution opportunities for fiscal year 2026 and beyond, including the first launches under new and expanded licenses such as Swarovski, Marni, Etro, and Marc Jacobs cosmetics. We still believe Coty can accelerate its sales growth,” Nabi added.
