Coty’s Q3 FY 26 results landed ahead of expectations, yet they underscored the operational strain the beauty group is working to address.
Net revenue slipped 1% as reported to $1.28bn, while the like-for-like decline reached 7% after factoring out currency impact and Middle East disruption. The bottom line was impacted by a $362.8m non-cash impairment tied to the Consumer Beauty division, pushing the reported operating loss to $372m. On an adjusted basis, EBITDA fell 38% to $127m, and free cash flow for the quarter was an outflow of $249m, though year-to-date free cash flow improved to $276m thanks to tighter working capital management.
The Prestige division, which generates 65% of sales, recorded flat reported revenues of $831m with a like-for-like decline of 5%. Fragrance volumes softened, partly offset by gains in prestige cosmetics, while brands like Burberry, Hugo Boss, and Calvin Klein continued to anchor the portfolio with launches such as BOSS Bottled Beyond and the upcoming Marc Jacobs Beauty makeup debut.
Consumer Beauty revenues contracted 4% as reported and 10% like-for-like to $451 million, pressured by lower mass fragrance and colour cosmetics sales. The impairment charge sat entirely within this segment, which also contended with elevated excess inventory costs and supply chain under-absorption.
Regionally, the Americas saw a 4% reported revenue decline to $510m, driven by weaker sell-in across the U.S. and Canada, partly cushioned by stronger travel retail. EMEA dropped 2% as reported to $598 million, with the Middle East conflict and softer trends in France and Central and Eastern Europe leaving an 11% like-for-like contraction. Asia Pacific was the outlier, growing 9% reported and 5% like-for-like to $174 million, supported by higher sales in China, Korea, Japan, and the Asian travel retail corridor.
Looking ahead, Coty projects a mid-single-digit like-for-like revenue decline in the fourth quarter, with the Middle East expected to subtract another 2% to 3% from sales. Full-year adjusted EBITDA is guided to a range of $838 million to $848 million, and management is targeting breakeven to a modest loss per share in the final quarter as it protects investment behind key commercial moments while continuing to implement its newly unveiled Coty.Curated framework.