Coty posts 8% decrease in income in fiscal Q4 | Motley fool

Coty (Coty -0.92%)The leading global cosmetics company with a wide portfolio of fragrance, cosmetics and skin care brands, released its results Q4 FY2025 20. August 2025. The key way was that it returned to $ 1.252.4 million in quarter, in accordance with earlier weaker periods and reduced shipments and reduced shipments. A modified slate profit (EPS) (non-GAAP) was $ (0.05). EPS modified $ (0.05) missed an estimate of $ 0.013465 and dropped from last year’s $ (0.03). Free cash flow for FY25 fell year -on -year and the pressure on margins persisted, especially in cosmetics segments on the mass market. A quarter brought the results in general as expired and provided resetting for Coty’s innovation plans heading to FY2026, although there are clear challenges in the American color of cosmetics and profitability of consumer beauty division.

Source: Estimates of analysts provided by Factst. Expectations of management based on management management, as stated in the 3.

Cota’s business model and strategic focus

COTY acts as a global cosmetics company with two basic divisions: Prestige, which includes top fragrances and skin care and consumer beauty, which includes cosmetics and personal care for the mass market. Its brands include both profile and licensing lines, allowing Cota competette in premium and value categories.

The company’s recent strategy focuses on innovation, optimization of the supply chain and balancing various brand portfolio. It is the cultivation of its prestigious segment, while the expansion of digital and electronic trading allows a wider range. The key factors for success are their own maintenance capital, regularly launch new products and remain agile with trends in the luxury and mass sector.

A quarter in review: key development and performance

The period saw Coty showing a decline in revenue by 8% per quarter, ending in June 30, 2025. This was largely expected because the leadership warned against “resetting the baseline” to allow the future launch of the product and erase excess pipe inventory. The Beauty Beauty Division has postponed a 12 % decrease in sales for a quarter. The prestigious segment, which focuses on luxury fragrances and skin care, saw at a 5% reimbursed decline that we have given the foundation. But he remained the main source of profit for Coty.

The Beauty Division division suffered a significant blow to the fee for reducing the value of assets in the fourth quarter, especially for its trading line, such as Max Factor and Covergirl. Operating income (non-GAAP) fell by 37% since the previous year, which largely reflected nail challenges in this division. Damage recognized – especially the reduction of the value of trademarks – was caused by difficult conditions in the US mass beauty market and similar trends in Europe and was recorded in the 3rd quarter.

During the quarter they were under the pressure of the margin. Although Coty reached $ 140 million in productivity savings for FY2025, reported and added gross margins dropped by 190 basis points compared to the previous year. Esta, which removes cashless and one -off fees to show that the main use, was $ 126.7 million, 23 %year -on -year, with a decrease in profit caused by consumer beauty and lower assets as a result of the softness of sales.

Digital and electronic trade continues to be a area of ​​strategic investment, while the electronic trade has returned through prestige and was $ 1 billion per FY2025. The company has expanded partnerships such as Amazon Premium Beauty Store and Tiktok Shop, and quoted the accelerated use of artificial intelligence (AI) in the planning and marketing of demand. In innovations, it was remarkable to the market that the boss had fun for the fragrance that the company claims to exceed the reference values ​​set by previous successful fragrance launch.

Inventory management was the main focus in the quarter, with COTY actively working to settle the consignments to correspond to the actual consumer requests. In the supply chain, the company also breathable for tariff risks by increasing production in the US, especially for mass market and entry fragrance, as shown in the commentary for FY2025. While these alleviation helped reduce the pressure to cost, this effort will not be obvious to the full improvement of the margin until the next fiscal year. Cota’s initiative continued on the sustainability queue and recognized the CDP for the List and ensured the Golden Rating from Ecovadis, putting Coty in the best 5% of the rated companies on sustainability.

The assets of the assets were $ 212.8 million at the FY2025, with $ 169.9 million (GAAP) assigned to consumer beauty trademarks in the middle of nail cosmetics. The net loss involved in ordinary shareholders (GAAP) has improved from the previous year, but this was the primary due to the low loss to the back market with the replacement of Rather’s own capital than operating profits. Free cash flow for FY25 decreased substantially year -on -year, influenced lower operating cash flow and higher capital requirements.

Regionally, the US was a big move on the company’s performance, with the return of Americas it was 12%. Europe, the Middle East and Africa have also decreased, mainly due to supplies and weaknesses for the beauty of consumers, while sales in Asia Pacific remain weak, but better than experimenting outside China.

Look forward: the outlook for management and trends watch

The guidance instructions for the next fiscal year is cautious. Coty Coty expects a 6% decline for Q1 FY2026 and another decline in the second quarter. In the second half of the FY2026, the highest line of sales is expected to return to the highest line (LFL), supported by the new start of the Prestige fragrance and the extended innovation pipeline. Management projects high single -digit to secondary percentage decrease in 1H26 modified EPS to 0.33 to $ 0.36, while free cash flow is a guide exceeding $ 350 million at $ 1h2026. The targeted lever effect is expected to be stable to or below 3.5 times the EBITDA (non-GAAP) according to the company’s statements.

It emphasized the upcoming launch of Prestige Fragrances and Nagoing Digital as potential drivers for Turn. Investors are advised to monitor the early performance of these new products, progress in other cost savings and stabilization stabilization initiatives in the American Cosmetin Channel.

The return and network connection presented by us generally accepts the Principles of Accounting (GAAP) unless otherwise stuck.

Schella is Folish AI, based on various models of large languages ​​(LLMS) and proprietary MOTLEY FOOL systems. All articles published by Scherai are reviewed by our editorial team and The Motley Fool will take over the final responsibility for the content of this article. The Jetra cannot own shares and therefore has no positions in any actions. Motley fool has no position in any of the shares. Motley fool has a publication of politics.