The U.S. cosmetics and fragrance group Coty (owner of brands such as Covergirl, Lancaster, Rimmel, Sally Hansen, and licensee for Burberry and Calvin Klein fragrances…) reported lower results for the January-March period, notably impacted by declining sales in the Middle East.
In the third quarter of its fiscal year, the group reported a 1% year-on-year decline in revenue to around USD 1.3 billion, according to a press release issued Tuesday, May 5, 2026. The figure was broadly in line with the consensus of analysts surveyed by FactSet.
Results were supported by a favorable currency effect, which added roughly 6% to growth. Excluding this tailwind, sales would have fallen by about 7%, including a 1.4% drag linked to the conflict in the Middle East, the company said.
All regions posted declines, with the exception of Asia-Pacific, where sales rose 9%, driven notably by strong performance in China and South Korea.
Over the period, the company reported a net loss of USD 411 million, compared with a loss of USD 409 million a year earlier.
"While the Q3 results were below our potential on an absolute basis, we were pleased to deliver profitability ahead of our guidance despite the disruption in our Middle East business late in the quarter," said Markus Strobel, Executive Chairman and Interim Chief Executive Officer since early January.
“This was a welcome first step, as we begin to gradually strengthen our operational control and execution,” he added.
Fewer launches
In September, the group announced a strategic review of its consumer beauty division as part of a plan to refocus on fragrances, notably by bringing together its “prestige” and “consumer” fragrance businesses.
On Tuesday, Coty said it plans to significantly reduce the number of smaller launches, to lower marketing asset production costs — partly through the use of artificial intelligence — while stepping up investment in consumer engagement.
For the fourth quarter of its 2026 fiscal year, the group expects “a moderate sequential improvement from third quarter sales trends.”
Business in the Middle East is expected to weigh on fourth-quarter sales by approximately 2% to 3%. On a reported basis, Coty expects foreign exchange to have a neutral impact in the quarter.
