Published by Global Banking & Finance Review®
Posted on August 20, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleCoty anticipates a sales drop due to weak U.S. spending and plans to raise premium fragrance prices to counter tariff costs.
By Juveria Tabassum and Anuja Bharat Mistry
(Reuters) -Coty on Wednesday forecast a drop in current-quarter sales as weak spending in the U.S. sapped demand for beauty products, and said it would raise prices for its premium fragrances to mitigate tariff costs.
The company's shares were down 16% in extended trading after it also posted a surprise fourth-quarter loss.
Coty will raise prices in its premium fragrances unit in the U.S. and onshore some production to cushion the impact of the 15% duties on imports from Europe under U.S. President Donald Trump's tariffs policy, executives said.
Retailers in the U.S. are increasingly cautious due to tariffs and are destocking inventories as cost-conscious consumers tighten spending on some beauty and skincare products.
Coty expects first-quarter like-for-like sales to decline 6% to 8%, compared with 4.5% growth a year ago and said product launches should drive sales growth in the second half.
"Our analysis of cosmetics category weakness points to value-seeking behavior, some fatigue with innovation as consumers circle back to basics and less frequent usage, particularly with Gen-Z migrating to fragrances," finance chief Laurent Mercier said in a statement.
Changes in the immigration policy under the Trump administration has also contributed to the slowdown in the country, Mercier added.
Coty also said it has invested disproportionately in its U.S. mass beauty business at the expense of more profitable fragrances unit.
The company would reallocate investment in fragrances instead of mass beauty, which has struggled of late due to intense competition from cheaper products online.
Coty reported an adjusted quarterly loss of 5 cents per share, compared with analysts' estimates of a profit of 2 cents per share, according to data compiled by LSEG.
The loss included a negative impact from an equity swap mark-to-market of $0.07 due to the stock price decline in the quarter, the company said.
Beauty retailer Estee Lauder also gave a weak annual profit forecast on Wednesday.
The company's fourth-quarter revenue fell 8% to $1.25 billion, but beat estimates of $1.20 billion.
(Reporting by Juveria Tabassum and Anuja Bharat Mistry in Bengaluru; Editing by Maju Samuel)
Coty expects first-quarter like-for-like sales to decline by 6% to 8%, compared to a growth of 4.5% a year ago.
Coty plans to raise prices in its premium fragrances unit to mitigate the impact of 15% duties on imports from Europe.
Coty reported an adjusted quarterly loss of 5 cents per share, which was below analysts' estimates of a profit of 2 cents per share.
Retailers in the U.S. are increasingly cautious due to tariffs and are destocking inventories as consumers tighten spending on beauty products.
Coty plans to reallocate investment from its U.S. mass beauty business to its more profitable fragrances unit, which has struggled due to competition.
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