Coty saw its sales decline in the third quarter, citing the impact of the conflict in the Middle East as a factor.

The company’s net revenue for the quarter ended March 31 slid 1 per cent to $1.281 billion. 

Like-for-like (LFL) revenue, which strips out currency exchange gains and losses, dropped 7 per cent. This included a 1.4 per cent headwind from the conflict in the Middle East. 

The reported net loss increased slightly from $409 million in the prior year to $411.4 million. 

Management said the third-quarter results were “below potential on an absolute basis”, but praised the fact that profitability came ahead of guidance despite the disruption in the Middle East business. 

By segment, prestige revenue, which represents 65 per cent of total sales, was flat on a reported basis and down 5 per cent on a LFL basis. This included an estimated 2 per cent headwind from the Middle East war.

Consumer beauty revenue dropped 4 per cent on a reported basis and 10 per cent on a LFL basis, including a 1 per cent headwind from the conflict.

Against the current backdrop, Coty said it is steadily implementing its ‘Coty Curated’ strategic framework, focusing on core brands and markets, reducing portfolio complexity, and identifying savings opportunities to boost consumer engagement and protect profitability. 

“We are embedding this framework into our FY27 action plans for both divisions, including significantly reducing the number of smaller launches, lowering marketing asset production costs in part through broad-based AI deployment for our owned brands, while increasing consumer engagement spending, and working to simplify our operational model,” said Markus Strobel, executive chairman and interim CEO. 

The retailer expects fourth-quarter LFL revenue to decline by a mid‑single‑digit percentage, reflecting a moderate sequential improvement from third-quarter sales trends. This outlook includes an estimated 2-3 per cent impact from the situation in the Middle East.