The Coty Group in turmoil

Last week's stock market closure saw the perfume group's shares fall by 12%. A negative peak was even recorded on 21 August, when the holding company's shares fell by 22.8% to their lowest level in five years.

Since the beginning of 2025, the company's valuation has fallen by 30%. What are the reasons for this collapse? And what could the future hold for the company in such a situation?

It is the fragrance and consumer products division that has impacted Coty's results, weakened by a difficult global context.

Coty has posted a string of negative results: sales slumped 9% in the last quarter, exceeding financial analysts' already pessimistic forecasts. The group has also just announced that turnover could fall by between 6% and 8% in the current quarter. Analysts had expected a more moderate decline of between 2% and 3%.

Concerned about falling sales, retailers are launching massive promotions to clear their stocks, creating a vicious circle that is contributing to the company's decline. The situation looks complicated for the group, which has just completed a five-year recovery plan aimed at giving the American multinational some breathing space. However, there may be hope in the high-end sector. This is the only one that has shown signs of recovery in recent months, particularly in the United States, where sales of luxury perfumes rose by 13% in July.

Coty has announced plans to strengthen its premium fragrance business by 2026, particularly through new product launches and a new geographical expansion strategy. However, if financial uncertainties persist, some consumer brands such as Rimmel could be sold to potential buyers.

The parent company also plans to transfer part of its production to the United States, which would reduce the impact of new tariffs imposed by the Trump administration. However, it will not be until 2026 that these various strategies will prove their effectiveness. For now, the spectre of the sale of part of the portfolio remains.