Coty Inc. (COTY): BCG Matrix [Dec-2025 Updated]

You're digging into Coty Inc.'s late 2025 positioning, and the picture is one of sharp division: a clear pivot toward high-margin prestige scenting while the mass-market legacy assets face a formal strategic review. Our BCG Matrix map clearly shows the engine room: Core Prestige Fragrances are the Cash Cow, driving 65% of net revenue, while Ultra-Premium Fragrances shine as a Star with +9% Like-for-Like growth. On the flip side, the Dogs quadrant is heavy with Mass Color Cosmetics, which took a $212.8 million impairment charge after a -5% revenue decline, making the future of Question Marks like Prestige Skincare critically important. Let's break down exactly where Coty is placing its bets now.

Background of Coty Inc. (COTY)

Coty Inc. (COTY) is an American multinational beauty company, though it was originally founded in Paris in 1904 by François Coty. Today, the company is incorporated in Delaware, United States, and maintains its global headquarters in New York City. Coty develops, manufactures, markets, and distributes a wide array of products, including fragrances, cosmetics, skin care, nail care, and professional hair care products. As of mid-2025, Coty employed 11,636 people and serves customers in over 120 countries and territories.

The company historically operated through two primary commercial divisions: Prestige and Consumer Beauty. For the full fiscal year 2025, which ended June 30, 2025, the Prestige division accounted for approximately 64.8% of total sales, while the Consumer Beauty division made up the remaining 35.2%.

In terms of financial performance for fiscal year 2025, Coty Inc. reported net revenue of $5,892.9 million, which represented a 4% decrease year-over-year, or a 2% decline on a like-for-like (LFL) basis. Prestige net revenue was $3,820.2 million, showing slightly positive LFL growth, driven by the fragrance category. Conversely, Consumer Beauty net revenue totaled $2,072.7 million, declining 8% reported and 5% LFL, largely due to softness in color cosmetics and body care.

Coty Inc. is recognized as one of the world's largest beauty companies and holds the position as the largest fragrance company globally. Its portfolio includes owned brands like CoverGirl, Rimmel, Sally Hansen, and Kylie Cosmetics, alongside luxury licensed brands such as Gucci, Burberry, and Calvin Klein fragrances.

Significantly, in late September 2025, Coty announced a major strategic realignment. This move involves initiating a comprehensive strategic review for specific assets within the Consumer Beauty division, including the mass color cosmetics portfolio, which generates about $1.2 billion in annual revenue, and the distinct Brazil business, which brings in close to $400.0 million in annual revenue. The remaining entity intends to more closely integrate its Prestige Beauty and Mass Fragrance businesses, which together account for around 69.0% of total sales, to focus on creating a unified 'fragrance engine.'

Coty Inc. (COTY) - BCG Matrix: Stars

You're looking at the engine room of Coty Inc. (COTY)'s current growth story-the Stars. These are the areas where the company has a strong market position in a market that's still expanding rapidly. Honestly, these units consume a lot of cash to maintain that leadership, but that's the price of dominating a high-growth space, so the goal is to keep feeding them investment.

The data from Fiscal Year 2025 clearly points to several segments fitting this profile, primarily within the fragrance portfolio, which accounts for the majority of the business. The strategy here is to invest heavily to ensure these leaders don't lose their edge as the market matures.

Here's a quick look at the key performance indicators for these high-potential areas based on the latest full-year results:

Ultra-Premium Fragrances are definitely leading the charge. This segment delivered an impressive +9% Like-for-Like (LFL) sales growth in Fiscal Year 2025. To put that in perspective, the broader Prestige Fragrance segment only saw +2% LFL growth for the full year. That +9% figure shows you where the premiumization trend is really paying off for Coty Inc. (COTY).

The foundation of this Star category is the Prestige Fragrance business itself. Over the five-year period from FY21 through FY25, this segment achieved a compound annual growth rate (CAGR) of +10% in net revenue, cementing its leadership position. While FY25 saw a slowdown in the overall prestige fragrance market, Coty Inc. (COTY) is banking on its pipeline of blockbuster launches to reignite high-single-digit sell-out growth, as seen with the recent Boss Bottled Beyond launch exceeding prior benchmarks.

Digital strength is another key indicator of a Star, and Prestige E-commerce is showing that high-growth characteristic. For the first half of FY25 (1H25), the e-commerce sell-out across both Prestige and Consumer Beauty grew by a double-digit percentage. The overall E-Commerce revenue for the full fiscal year 2025 reached $1 billion. This channel is critical for brands like Burberry and Marc Jacobs, where market share gains are being made online.

Finally, you have the aggressive push into adjacent, high-growth scenting formats, specifically Fragrance Mists/Body Mists. Coty Inc. (COTY) is making strong headway in this exciting new market, which is valued at approximately $7 billion. The plan involves rolling out mist launches across over a dozen of its brands in the coming year, which is a clear investment to capture market share in this profitable, high-growth area.

You should track the investment allocation to these areas, especially the new product development spend supporting those blockbuster launches, because that's where the cash burn is happening to secure future Cash Cow status.

Coty Inc. (COTY) - BCG Matrix: Cash Cows

You're looking at the core engine of Coty Inc.'s profitability, the segments that generate the cash to fund everything else. These are the high-share, mature businesses that, frankly, print money when managed right. For Coty Inc., this primarily centers on its fragrance empire.

Core Prestige Fragrances stand out as the largest revenue contributor, bringing in $3,820.2 million in net revenue for fiscal year 2025, which accounted for 65% of total sales. While reported sales saw a 1% decline, the like-for-like (LFL) growth was reported as slightly positive for FY25, indicating resilience in the core business despite market moderation. Over the five-year transformation period ending in FY25, this segment delivered a best-in-class net revenue compound annual growth rate (CAGR) of 10% in Prestige fragrance sales.

The profitability in this segment is what makes it a true Cash Cow. For the third quarter of FY25, the Prestige division delivered a strong adjusted operating margin of 19.1%, which was an increase of 210 basis points year-over-year, even as sales moderated. This margin strength, coupled with an adjusted EBITDA margin of 22.4% in that same quarter, shows the high-margin nature of these established, high-share brands. You want to see these numbers because they confirm the pricing power and disciplined promotion strategy at work.

Here's a quick look at how the fragrance pillars stack up financially for the full fiscal year 2025:

Even within the Consumer Beauty division, which faced an 8% reported net revenue decline overall in FY25, the fragrance component acts as a reliable cash generator. Coty Inc. holds the position as the #1 mass fragrance company in developed markets. This segment delivered an LFL sales growth of +8% in FY25, showing that even in the lower-priced tier, Coty's market leadership translates to strong top-line performance. For context, in the first quarter of FY25, mass fragrance brands grew by double-digit percentages.

Established Licensed Brands, such as Calvin Klein and Hugo Boss fragrances, are the backbone of the Prestige segment's stable, high-margin cash flow. These mature, high-share licenses benefit from the overall strong brand equity and distribution network of the Prestige division. While specific revenue for just these licenses isn't broken out, the overall Prestige segment's ability to maintain a 19.1% adjusted operating margin in Q3 FY25, despite headwinds, speaks to their consistent contribution. Coty Inc. is also actively securing future cash flow by entering new licensing agreements, like the one with Swarovski in late 2024, and planning for new fragrance lines from Marni in 2026.

Coty Inc. (COTY) - BCG Matrix: Dogs

You're looking at the units in Coty Inc. (COTY) that are stuck in low-growth markets with low market share. These are the Dogs, the brands or businesses that tie up capital without offering much return. The general playbook here is to avoid pouring good money after bad; expensive turn-around plans rarely pay off for these assets.

Dogs are defined as business units or products with a low market share and low growth rates. They often just break even, not consuming or generating significant cash, but they are cash traps because capital is stuck there. Divestiture is usually the prime strategy for these units.

The Consumer Beauty segment, which houses the mass color cosmetics, is clearly exhibiting these characteristics based on the latest figures.

Mass Color Cosmetics Portfolio

The brands in this area, including CoverGirl, Rimmel, and Max Factor, are facing such headwinds that Coty Inc. initiated a formal strategic review for potential sale. This review is aimed at unlocking the full potential of this business, which generated approximately $1.2 billion in sales in FY25. That figure represents a significant chunk of the segment that is under scrutiny.

Consumer Beauty Overall Performance

The entire Consumer Beauty segment is showing the strain of these low-growth, low-share positions. For the full fiscal year 2025, the segment's net revenue declined 5% on a like-for-like (LFL) basis. On a reported basis, the segment's net revenue was $2,072.7 million, which was an 8% decrease year-over-year. This weakness is directly attributed to ongoing softness in the U.S. mass cosmetics market, which is a key indicator of the low-growth environment for these brands.

Here's a quick look at how the segment performed financially in FY25:

Impaired Assets

The market's low perception of value in this area is reflected on the balance sheet. In the third quarter of fiscal year 2025, Coty Inc. recognized a substantial non-cash asset impairment charge. This charge amounted to $212.8 million and was primarily related to the color cosmetics business within Consumer Beauty. This move signals a formal write-down of perceived value due to the challenging category trends observed in both the U.S. and Europe.

Body Care Business Drag

Adding to the overall segment pressure, the Body Care business specifically contributed to the drag in the first half of fiscal year 2025 (1H25). The reported net revenue for Body Care experienced declines during that period. This weakness in Body Care, coupled with the issues in color cosmetics, drove the overall negative performance for the Consumer Beauty division. For instance, in the fourth quarter of FY25 (4Q25), the reported net revenue decline of 12% (both reported and LFL) was explicitly driven by lower sales in color cosmetics and body care.

The key areas contributing to the Consumer Beauty segment's reported revenue decline in FY25 included:

• Color cosmetics sales weakness.
• Body care sales decline.
• Ongoing weakness in the U.S. mass cosmetics market.

Coty Inc. (COTY) - BCG Matrix: Question Marks

You're analyzing the parts of Coty Inc. (COTY) that are in high-growth markets but currently hold a low market share, meaning they consume cash while waiting to become Stars. These units require heavy investment to gain traction quickly or risk becoming Dogs.

Prestige Skincare: A Key Strategic Focus

Prestige Skincare is positioned as a key growth area, with a prior goal to double sales to between $500 million and $600 million by Fiscal Year 2025. While the overall Prestige division saw its net revenue decline by 1% on a reported basis in FY25, reaching $3,820.2 million, this segment represents a strategic push into a high-potential market. The challenge here is building share against established players; it remains a smaller, developing component within the larger Prestige division, which is heavily weighted toward fragrances.

Prestige Makeup (e.g., Gucci, Kylie Cosmetics)

This area shows high growth potential, evidenced by Kylie Cosmetics growing reported net revenues in Q1 FY25. However, volatility is clear. For instance, Gucci makeup sales specifically declined due to weakness in the Chinese mainland and Asia Travel Retail during Q1 FY25. This volatility-high potential offset by market-specific setbacks-is classic Question Mark behavior. The broader Prestige cosmetics business was also hit by cautious orders from retailers in Q1 FY25.

Brazil Business: Regional Focus Area

The Brazil business falls under the broader LATAM region, which contributed to a 9% LFL revenue growth in Coty's growth engine markets in 1H25. As per the scenario, this distinct regional business is generating close to $400 million in annual revenue. Its inclusion in a strategic review suggests management is deciding whether to heavily invest to accelerate its growth or divest, given its current market share position relative to its growth trajectory.

New Mass Skincare Initiatives

These initiatives are part of the Consumer Beauty segment, which saw its net revenue decline by 8% on a reported basis in FY25, totaling $2,072.7 million. However, Mass Skincare specifically showed growth in 1H25. This segment is unproven against large competitors and requires significant cash infusion to build market share, making it a clear Question Mark needing a decision on investment versus divestment.

Here's a quick look at the segment context for these potential Question Marks, using the latest full-year data available:

The core issue for these Question Marks is the cash drain associated with building market share in high-growth areas, like Prestige Skincare aiming for that $500 million to $600 million goal, while other parts of the portfolio, like Consumer Beauty, are contracting.

You need to decide where to place your bets for future Star status. Finance: draft the required investment allocation proposal for Prestige Skincare vs. New Mass Skincare by next Tuesday.