By Connor Hart

Coty swung to a loss in its fiscal third quarter as sales fell, though the company guided for a turnaround in fiscal 2026 fueled by a resilient beauty market and new products.

Coty posted a loss of $409 million, or 47 cents a share, compared with a profit of $500,000, and zero cents per share, a year earlier. Analysts polled by Factset had been expecting earnings of 1 cent a share.

Adjusted per-share earnings came in at 1 cent, compared with analyst expectations for 5 cents.

Revenue fell 6.2% to $1.3 billion, in line with Wall Street estimates. The company attributed its declining top line to an uncertain market backdrop and foreign exchange headwinds.

Coty is a house of brands whose portfolio of beauty products includes CoverGirl, Sally Hansen and Rimmel, as well as fragrances by Gucci and Marc Jacobs.

"While we are not satisfied with our net revenue performance, Coty's strong fundamentals, coupled with our multi-pronged attack-plan for accelerating innovation, distribution and efficiencies, gives us confidence for the years ahead," Chief Executive Sue Nabi said.

This year has been a transitional year for the company, she said, as it faces a slowing fragrance market and elevated retailer inventories. Coty will look to counter these obstacles in part with the launch of new products across all segments in fiscal 2026.

Nabi added that beauty has historically been a resilient category during economic downturns.

Coty guided for sales to decline in the high-single-digit percentage range during the current quarter. The company said it will continue to rightsize retailer inventories and that current trends are expected to continue throughout the period.

The outlook translates to a 2% decline in like-for-like sales in fiscal 2025. The company now expects adjusted per-share earnings of 49 cents to 50 cents, down from prior guidance of 50 cents to 52 cents.

Analysts are expecting full-year adjusted earnings of 38 cents a share and revenue of $5.96 billion, representing a 2.7% drop from last year.

Shares fell 2.5%, to $5.04, in after-hours trading. Through Tuesday's close, shares have lost more than half of their value in the past year.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

May 06, 2025 17:23 ET (21:23 GMT)

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