Core Insights - Coty Inc. has initiated a strategic review of specific assets within its Consumer Beauty division, exploring options such as sales, spin-offs, or other strategic transactions [2][3][8] - The review includes Coty's mass color cosmetics portfolio, generating approximately $1.2 billion in annual revenue, and its Brazil business, which contributes close to $400 million in annual revenue [3][8] - The remaining Coty entity aims to strengthen its position in the global fragrance market by integrating its Prestige Beauty and Mass Fragrance businesses, which together account for around 69% of total sales [4][12] Financial Performance - In fiscal year 2025, total revenue fell 3.7% year-over-year to $5.9 billion, with Consumer Beauty revenue declining 8.3% to $2.1 billion [21][22] - The adjusted EBITDA for FY25 decreased by 0.9% year-over-year to $1,082 million, while adjusted net income declined 41.6% to $188.8 million [22][23] - The Consumer Beauty segment's like-for-like revenue declined by 5% in FY25, contrasting with the flat performance of the Prestige fragrance segment [13][19] Strategic Rationale - The strategic review is driven by the underperformance of the Consumer Beauty division compared to the Prestige division, which has seen stronger growth [8][12] - Coty aims to optimize its brand portfolio and focus on higher-margin segments, as the global luxury perfume market is projected to grow from $52 billion in 2025 to $79.5 billion by 2030, representing a CAGR of 8.9% [12][14] - The initiative aligns with the investment strategy of Coty's controlling shareholder, JAB Holding Company, which focuses on divesting noncore assets to enhance value [14][15] Organizational Changes - Coty has appointed Gordon von Bretten as President of the Consumer Beauty division to drive mass cosmetics and personal care businesses [6] - Citibank is advising Coty on potential transaction options, including a spinoff or divestiture [7]