Coty's Q1 Revenue Slides 1% as Interim CEO Signals Turnaround

Coty Inc. posted a 1 percent net revenue decline to $1.55 billion for the first quarter of fiscal-year 2027, ended Sept. 30, while adjusted net income climbed to $146.1 million from $106 million a year earlier — a gain of roughly 38 percent, or about $40 million.

The quarter marks the opening of what the company has framed as a transition year. Prestige net revenue fell 1 percent to $1.05 billion. Consumer beauty net revenue dropped 2 percent to $496.8 million.

What did the interim CEO say?

"Our first-quarter results were ahead of expectations on sales, adjusted EBITDA, and EPS, alongside a significant improvement in free cash flow, supported by the focus of Coty.Curated," said Markus Strobel, executive chairman and interim chief executive officer.

The like-for-like sales decline narrowed to 2 percent, in line with the fourth quarter of the prior fiscal year. Strobel contrasted that with declines of 6 percent in the first half and 4 percent in the second half of fiscal 2026. He credited "improvements in key markets like the U.S., Asia-Pacific and Latin America."

"While our progress in the first quarter is encouraging, we have more work to do to translate green shoots into a broad-based recovery," Strobel said.

Where does the strategic review stand?

Coty has previously announced a strategic review of its consumer beauty business, which generated $496.8 million in the quarter. Strobel reaffirmed the timeline.

"We remain committed to completing the strategic review by the end of calendar 2026," he said. "Alongside it, we are designing the organization and cost structure to improve execution and prioritize reinvestment behind our brands."

He listed the company's assets: "a portfolio of leading brands, strong category positions, and a differentiated end-to-end global platform." He also cautioned that the path forward will not be linear.

"As we've previously shared, FY27 will be a transition year. We expect the recovery to be uneven, and implementation will take time," Strobel said.

Why does the Marc Jacobs deal matter?

On Tuesday, WHP Global and G-III Apparel Group — the new owners of Marc Jacobs — signed a 40-year beauty license extension with Coty. The agreement secures one of Coty's longest-running fragrance franchises for four decades.

"Since our partnership began in 2003, Coty has built multiple iconic fragrances, with Marc Jacobs fragrances now ranking among the top 10 to 15 prestige female fragrances across the U.S., U.K., Canada and Australia," said Strobel.

The license, which has run for more than two decades, also covers a newer business line. "The recent launch of Marc Jacobs Beauty makeup is also off to a strong start across these markets," Strobel added.

He positioned the deal as both a growth platform and a signal to other licensors. "This extension is also a powerful testament to Coty's position as a partner of choice for the world's leading luxury fashion and lifestyle brands," he said.

With the consumer beauty review due by the end of calendar 2026 and the Marc Jacobs license locked through the 2060s, Coty enters the rest of FY27 with its prestige portfolio secured and its mass-market future still open.