Coty Cuts Annual Profit Forecast Amid 3% Revenue Drop

Coty has reported a decline in its quarterly revenue, falling 3.34% to $1.67 billion, which is below analyst expectations of $1.72 billion and marks the company's first revenue drop in eight quarters. This downturn is attributed to slowing demand for cosmetics amid inflationary pressures, tighter inventory strategies by retailers, and weak sales in Asia's travel retail sector. The company has adjusted its annual profit forecast, now expecting adjusted per-share profits between 50 and 52 cents, down from a prior estimate of 54 to 57 cents. Competitors like Elf Beauty and L'Oreal have also noted similar trends in the mass beauty market, indicating a broader industry slowdown. Coty's CEO expressed confidence that the challenges are temporary, highlighting strong sell-out growth in fragrance brands as a potential recovery avenue. However, the overall landscape indicates consumers are becoming increasingly cautious with discretionary spending due to economic uncertainties.