Coty experienced declines in color cosmetics and body care, particularly in the Asia-Pacific region, including challenges in the Chinese market and Travel Retail.OlekAdobe
Coty Inc. and Shiseido have both released their latest financial results, highlighting varied performance across regions and product categories.
Coty reported its financial results for the first half (1H25) and second quarter (2Q25) of fiscal year 2025, ended December 31, 2024. While the company achieved significant gross and operating margin expansion, its net revenue faced pressure from foreign exchange impacts, inventory reductions, and a slowing mass beauty market. Prestige fragrance sales were a bright spot, growing in both reported and like-for-like (LFL) terms, driven by brands like Burberry and Hugo Boss. However, Coty experienced declines in color cosmetics and body care, particularly in the Asia-Pacific region, including challenges in the Chinese market and Travel Retail. Adjusted EBITDA rose 3% year-over-year in 1H25, reflecting strong cost management and gross margin improvements.
Meanwhile, Japanese cosmetics giant Shiseido reported a sharp 73% drop in full-year operating profit, largely due to declining consumer spending in China, per Reuters, a critical market for the company. Shiseido’s China sales fell 4.6% year-over-year on a like-for-like basis, with the company expecting further declines in 2025 amid worsening economic sentiment and rising household savings in the region. Despite challenges in China, Shiseido saw a 10% increase in net sales in Japan, bolstered by strong tourism-related purchases, and forecasts similar growth domestically in the coming year.
Both companies face headwinds in the Asia-Pacific market, particularly in China, but continue to see opportunities for growth in other regions and categories, such as prestige fragrances for Coty and domestic sales for Shiseido.