Coty Faces Slower Beauty Demand: What It Means for FY26 Sales

Core Insights - Coty Inc. is facing a cooling beauty market with increased promotional intensity, impacting near-term sales trends for fiscal 2026 [1][6] Market Performance - The prestige beauty market grew approximately 5% in Q2 of fiscal 2026, down from roughly 6% in Q1, with prestige fragrances slowing from 5% growth to 3% [2][8] - Weaker sell-out performance was noted in the U.S., Germany, and the U.K., while emerging regions like Asia Pacific, the Middle East, and Latin America showed stronger sell-out [3][8] Sales Trends - The U.S. prestige fragrance market growth slowed from 7% in Q1 to about 3% in Q2, with consumer purchases concentrated at the end of the quarter and aggressive promotional activity suppressing broader growth [4][6] - For Q3, Coty anticipates like-for-like revenues to decline by a mid-single-digit percentage, primarily due to weakening Consumer Beauty sales trends [5][6] Strategic Focus - Coty is focusing on sharper execution, core brands, and key markets to support a more stable recovery over time despite the challenging market conditions [6]