US beauty giant Coty announced on Wednesday, November 5, a decline in results for the first quarter of its 2026 fiscal year, but said it expects “a return to growth in the second half of 2026.” The company is banking on continued strong demand in the fragrance segment, where it aims to further strengthen its market position.

In the first quarter (July to September 2025), net profit fell by 19% to USD 64.6 million. Revenue decreased by 6% to USD 1.58 billion.

Sales declined in all regions: down 6% in the Americas (both on a reported and like-for-like basis), down 4% in the EMEA region (-9% on a like-for-like basis) and down 9% in the Asia-Pacific region (both on a reported and like-for-like basis).

“We expect Q2 sales to be at the more favorable end of our previous guidance, with a return to sales and profit growth in the second half of FY26,” the group announced in a press release.

“Coty’s strategic progress is accelerating as we elevate Coty as a Prestige beauty company with an emphasis on fragrances and scenting across price points, complemented by capabilities in prestige cosmetics and skincare,” said Sue Nabi, CEO of Coty.

In September, Coty announced the launch of a strategic review of its consumer cosmetics division to refocus on fragrances by merging its "prestige" and "mass market" fragrance divisions.

In the "ultra-premium" category, i.e., perfumes sold for more than 150 euros (Jil Sander, Chloé, Infiniment Coty, Burberry, Gucci, etc.), Coty’s sales increased "by 17%," Chief Financial Officer Laurent Mercier told AFP.

End of Gucci license

However, Coty is set to lose the Gucci license, as Kering — the luxury group that owns the Italian brand — has agreed to sell its beauty division to the world’s leading cosmetics company, France’s L’Oréal.

The deal grants L’Oréal the rights to enter into an “exclusive 50-year licensing agreement for the creation, development, and distribution of Gucci fragrance and beauty products,” effective after Coty’s current license expires in 2028.

“Coty continues to operate Gucci Beauty under its current agreement, with a focus now on optimizing the brand during its remaining term,” added the group.

“Even without the Gucci license, Coty remains the world’s number three player in prestige fragrances — a position we intend to reinforce by investing in our flagship brands and expanding our portfolio with new licenses,” emphasized Mr. Mercier.