Coty continues strategic review following successful debt reduction

Paris, France - US cosmetics and fragrance group Coty, which appointed a new interim CEO in January, published mixed results on Thursday. The company reported its “lowest debt in nine years” and is continuing its strategic review.

In the second quarter of its fiscal year, from October to December, Coty's turnover increased by 1 percent year-over-year to 1.68 billion dollars. Over six months, sales fell by 3 percent to 3.25 billion dollars. Its debt at the end of 2024 stood at 2.6 billion dollars. This is “the lowest debt level in nine years,” chief administrative and financial officer Laurent Mercier told AFP.

The debt reduction was supported by the sale of Coty's remaining 26 percent stake in haircare brand Wella to KKR. “This allowed us to secure 750 million dollars in cash,” according to Mercier.

“Coty has many first-class assets and competitive advantages. However, our financial results over the past year and a half have been disappointing, and our current share price reflects this reality,” stated interim CEO Markus Strobel in the press release. Since the beginning of 2025, the share price has more than halved.

“To radically transform our performance and leverage our strengths, we are launching our ‘Coty Curated’ strategic framework. This includes clearer priorities; more targeted investments; improved execution; and increased support for our core activities. Concurrently, we are continuing our portfolio review,” he added.

“We are in a phase of reallocating resources,” explained Mercier. “We are refocusing investments on prestigious licences such as Hugo Boss, Burberry, Calvin Klein, and Chloé.”

Markus Strobel, who spent 33 years of his career at Procter & Gamble, took the helm of Coty on January 1. His appointment follows the group's announcement in September of a strategic review of its consumer cosmetics division. The aim is to refocus on perfumery by merging the “prestige” and “consumer” fragrance divisions.

Coty now risks losing the Gucci licence, as luxury group Kering, owner of the Italian brand, has sold its beauty division to the world's leading cosmetics company, the French firm L'Oréal.

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