Yesterday, Coty Inc. reported financial report of Q4 in FY2025 and full-year performance of FY2025. It had a challenging fiscal year 2025, as revenue softness across its Prestige and Consumer Beauty divisions weighed on results despite improved margins.
For the twelve months ended June 30, 2025, net revenue declined 4% to $5.89 billion, including a 1% negative impact from foreign exchange, with like-for-like sales down 2%. Despite top-line pressure, gross margin improved 40 basis points to 64.8%, and adjusted gross margin expanded 50 basis points to 64.9%. However, operating income dropped 56% to $241.1 million, with a reported operating margin of just 4.1%.
In the fourth quarter, net revenue slipped 8% to $1.25 billion, reflecting a 9% like-for-like decline. Prestige fell 5% reported and 7% like-for-like, impacted by underperformance in the U.S. market and inventory adjustments, while Consumer Beauty dropped 12% across both measures, reflecting persistent weakness in mass color cosmetics.
In FY25, Prestige net revenue of $3.82 billion, representing 65% of the Company’s total annual sales, declined 1% on a reported basis. Growth in prestige fragrances was offset by lower year-over-year net revenue in the prestige makeup and skincare categories. Prestige net revenue was slightly positive on a LFL basis in FY25. In 4Q25, Prestige net revenue of $760.6 million, representing 61% of the Company’s total quarterly sales, decreased 5% on a reported basis and included a 2% benefit from FX.
On a LFL basis, net revenue declined 7% in the quarter. 4Q25 reported net revenue was impacted by the Company’s underperformance relative to the Prestige beauty category in the key U.S. market, as well as proactive intervention to reset the baseline, including rightsizing retailer inventory levels with current demand trends. The Prestige business was also impacted by declines in prestige makeup and skincare sales in the quarter.
In FY25, Consumer Beauty net revenue of $2.073 billion, representing 35% of the Company’s total annual sales, declined 8% on a reported basis, which included a 3% negative impact from FX. During this period, Consumer Beauty reported net revenue declined in color cosmetics and body care, partially offset by growth in mass fragrance and mass skincare. Consumer Beauty net revenue declined 5% on a LFL basis. In 4Q25, Consumer Beauty net revenue of $491.8 million, representing 39% of the Company’s total quarterly sales, decreased 12% on both a reported and LFL basis. The quarterly decline in reported net revenue was primarily driven by lower sales in color cosmetics and body care. In both periods, reported and LFL sales were impacted by ongoing weakness in the global mass color cosmetics market, particularly in the U.S.
In FY25, the Consumer Beauty segment posted a reported operating loss of $127.4 million, compared to reported operating income of $89.3 million in the prior year. The reported operating loss margin was 6.1%, compared to a reported operating margin of 4.0% in the prior year period. During the same period, adjusted operating income of $79.7 million declined from $129.0 million in the prior year with an adjusted operating margin of 3.8%, down 190 basis points. FY25 adjusted EBITDA of $197.1 million declined from $251.5 million in the prior year, resulting in an adjusted EBITDA margin of 9.5%, down 160 basis points year-over-year. In 4Q25, the Consumer Beauty segment generated a reported operating loss of $16.0 million, compared with reported operating income of $10.3 million in the prior year.
By region, results were mixed. The Americas generated $2.37 billion in revenue, down 8% on a reported basis and 3% like-for-like, reflecting weakness in U.S. Prestige and continued softness in mass-market cosmetics. EMEA, Coty’s largest region, contributed $2.81 billion, up 1% both reported and like-for-like, led by growth in several European markets and Africa. Meanwhile, Asia Pacific sales totaled $708.1 million, a decline of 8% reported and 7% like-for-like, driven by softness in China, Australia, New Zealand, and Travel Retail. Outside of China, however, Coty delivered standout growth, with sell-out in Asia ex-China growing nearly four times ahead of the market and double-digit gains in fragrance and skincare.
