Coty (COTY) Q3 2025 Prepared Remarks earnings summary

Executive summary

• Fiscal 2025 was a pivotal transition year amid a challenging consumer and retail environment, with proactive measures to reset the business for a healthier fiscal 2026.

• Net revenue for the nine months ended March 31, 2025, was $4,640.5M, down 2% year-over-year, with flat like-for-like revenue; Q3 net revenue was $1,299.1M, down 6% year-over-year, with a 3% like-for-like decline.

• Prestige business faced a triple headwind: slowing fragrance market, lapping blockbuster launches, and elevated retailer inventory, especially in the U.S.

• Consumer Beauty recalibrated to focus on higher-margin mass fragrances and reduce reliance on less profitable color cosmetics.

• The company is executing a multi-pronged transformation plan, including cost savings, innovation, and organizational changes to drive FY26+ growth.

Financial highlights

• Q3 net revenues declined 3% like-for-like; Prestige sales down 2.5%, Consumer Beauty down 4.8%.

• Q3 reported operating loss was $280.4M, including a $212.8M asset impairment in Consumer Beauty; adjusted operating income was $147.9M, up 3% year-over-year.

• Adjusted gross margin for the first nine months reached 65.6%, up 120 bps year-over-year; Q3 margin declined 50 bps due to normalization.

• Q3 adjusted EBITDA was $204.2M (up 2%); YTD adjusted EBITDA was $955.0M (up 3%).

• Free cash flow for the first nine months was $243 million.

Outlook and guidance

• Fiscal 2025 like-for-like sales expected to decline 2%, with a high single-digit decline in Q4.

• Reported sales to see a mid-single-digit decline, including a 3% Forex headwind.

• Gross margin for FY25 expected at ~65%; EBITDA margin expansion to ~18.5%.

• FY25 EPS guided to $0.49–$0.50, near the low end of prior guidance.

• FY25 free cash flow expected at ~$300 million; leverage to remain around 3.2x.