Coty executes strategy to boost sales growth

Olivia Smith 08/21/2026

The beauty landscape is undergoing a fascinating transformation, as Coty moves decisively toward a streamlined future. While the global environment presents its usual challenges, the company is simultaneously executing a bold new strategy designed to sharpen its focus and amplify its core strengths.

In the fourth quarter of fiscal year 2026, Coty reported a modest 1% year-on-year sales growth, which pleasantly surprised many observers. This positive momentum came as the beauty group rolled out its ambitious Coty.Curated strategic framework, signaling a major shift in how it approaches its vast portfolio of prestige and consumer beauty brands.

Despite this headline growth, the underlying sales picture showed some volatility. Like-for-like sales experienced a slight decline of 1%, even while managing the estimated 1% sales headwind stemming from the ongoing Middle East conflict. This balance between external pressures and internal strategy execution paints a complex picture of navigating global volatility.

Looking deeper into the financial performance, Coty demonstrated resilience. For the full fiscal year 2026, operating cash flow climbed to US$538 million, and free cash flow reached US$348 million, demonstrating strong financial health even as profit figures were managed.

The heart of the recent changes lies in the implementation of the Coty.Curated approach. This strategy is all about strategic simplification, aiming to strengthen the performance of core prestige and consumer beauty businesses by decluttering operations.

To achieve this, the company is actively streamlining its operations across the board. This involves recalibrating commercial activities, Consumer Beauty Research and Development, and global brand marketing. The goal is clear: reducing the number of Stock Keeping Units (SKUs) and concentrating investment squarely behind fewer, high-impact launches and hero products.

Further simplifying the portfolio involves significant divestments. Coty is monetizing the remaining Wellastake assets, realizing US$750 million, and finalizing the agreement to return the Gucci Beauty license to Kering, a deal valued at US$400 million.

This portfolio simplification isn’t just about divestment; it’s a calculated move for the future. Coty is positioning fiscal year 2027 as a critical transition year, focusing intently on restoring competitiveness and simplifying the business structure as sell-out continues to lag behind broader market trends.

The proceeds generated from these portfolio disposals are being strategically redirected toward debt reduction and focused investment in its core prestige fragrance and beauty brands. This strategic repositioning allows the company to sharpen its focus while setting the stage for major upcoming decisions.

As the group moves forward, Coty is preparing for the eventual exit of the Gucci Beauty license in fiscal year 2028, and will finalize its strategic review of the Consumer Beauty segment by the end of 2026. It is a testament to a company proactively reshaping its identity to ensure sustained growth in an ever-evolving market.