Coty Full-Year Revenue Drops Five per Cent to US$5.8 Billion Ahead of Gucci License Loss

Coty posted a five per cent decline in full-year net revenue to US$5.8 billion as the beauty group prepares to surrender its lucrative Gucci license.

Fourth-quarter adjusted EBITDA dropped 26 per cent to US$93.6 million, dragging operating margins down 270 basis points to 7.4 per cent. Like-for-like sales in the final quarter slipped one per cent to US$1.3 billion, prompting Coty shares to fall 7 per cent in after-hours trading after management withheld financial guidance for fiscal 2027.

Markus Strobel, Coty executive chairman and interim chief executive, designated fiscal 2027 a transition year focused on lowering fixed overheads. The departure of Gucci Beauty will trigger an additional drop in revenue and profit in fiscal 2028.

Fixed costs and new fragrance licenses

Management plans to counter the Gucci exit by cutting fixed corporate costs and expanding newer licensing contracts. The pipeline relies on cosmetics under Marc Jacobs Beauty alongside fragrance agreements with Swarovski, Etro and Marni.

GlobalData managing director Neil Saunders noted that replacing Gucci volume requires stronger performance from remaining prestige lines, especially across department stores and travel retail networks. Retail OCD chief executive Barney Stacher cautioned that cost reductions cannot compensate for weak brand heat across mass colour cosmetics lines such as CoverGirl, Rimmel and Max Factor.

Mass beauty shelf pressure

Fragrance sales continue to generate cash across Asian metropolitan markets, but Coty’s mass cosmetics portfolio faces intense shelf competition from nimble regional and domestic beauty labels. Rebuilding brand visibility in physical retail and digital storefronts requires targeted product development rather than broad promotional discounting, according to Pepperdine Graziadio Business School marketing professor Kimber Maderazzo.

Coty will deliver the final decisions from its strategic review of the Consumer Beauty unit by the end of 2026 before the Gucci transition takes effect in fiscal 2028.