Coty Sees Prestige Beauty Growth Slow to 5% as Q3 Sales Forecast Drops
Coty’s fiscal Q2 prestige beauty growth slowed to 5% from 6%, with fragrance moderating from 5% to 3% growth and flat sell-out in U.S., Germany and U.K. markets. Holiday promotions depressed net sales, and Coty forecasts mid-single-digit like-for-like revenue declines in Q3 as Consumer Beauty softens.
1. Fiscal Q2 Market Performance
In fiscal second quarter, Coty reported 5% growth in prestige beauty versus 6% in Q1. Prestige fragrances moderated from 5% to 3% growth, with U.S., Germany and U.K. sell-out broadly flat while emerging markets showed stronger sell-out.
2. Holiday Promotions Pressure Sales and Gross Net
Aggressive promotional activity during the U.S. holiday season concentrated consumer purchasing at quarter-end, suppressing fragrance category growth and pressuring gross-to-net rates and profit contributions.
3. Q3 Guidance and Strategy
For third quarter, Coty forecasts like-for-like revenues to decline by mid-single-digits driven by softer Consumer Beauty trends, while elevated promotions remain a headwind to net sales and gross margin. Management plans to focus on core brands and key markets to support recovery.