Coty Inc. Reports 3% Revenue Decline to $1.67 Billion in Q2 Fiscal 2025

Coty Inc. reported a decline in financial performance for the second quarter of fiscal 2025, with net revenues of $1.67 billion, down 3% from $1.73 billion in the same period last year. The decrease was attributed to a 3% drop in unit volume, particularly in the body care segment in Brazil, and a negative foreign currency impact of 2%. Despite these challenges, the company experienced a positive price and mix impact of 2%, primarily due to prior year price increases. The Prestige segment saw a slight revenue decrease of 1%, while the Consumer Beauty segment faced a more significant decline of 8%.

Coty's gross profit for the quarter was $1.11 billion, resulting in a gross margin of 66.7%, an increase from 65.1% in the prior year. This improvement was driven by reduced manufacturing and material costs, which decreased as a percentage of net revenues. Operating income rose to $268.2 million, up 13% from $236.7 million a year earlier, reflecting a higher operating margin of 16.1%. The company attributed this increase to lower costs of goods sold and a decrease in restructuring expenses.

In terms of strategic developments, Coty has been focusing on its digital and e-commerce capabilities, aiming to enhance brand visibility and product innovation. The company continues to expand its presence in growth markets, particularly in Asia and Latin America, despite facing challenges in these regions. Coty also reported a significant increase in losses related to forward repurchase contracts, which contributed to a net income attributable to Coty Inc. of $23.7 million, a sharp decline from $180.9 million in the previous year.

Operationally, Coty has maintained a workforce of approximately 871.99 million shares of Class A Common Stock outstanding as of February 3, 2025. The company is actively managing its debt, with total liabilities reported at $7.51 billion, down from $7.83 billion in the previous fiscal period. Coty is also focusing on cost reduction initiatives, targeting savings of over $120 million to navigate the current economic landscape.

Looking ahead, Coty anticipates a low-single-digit percentage decline in reported net revenue for fiscal 2025, factoring in a negative impact from foreign exchange rates. The company aims to maintain its gross margin in the mid-sixties percentage range while continuing to invest in product initiatives and brand support. Coty remains committed to its strategic transformation agenda, which includes enhancing operational efficiencies and expanding its market presence.