Coty announced on Tuesday that it has begun a strategic review of its consumer beauty division as the company shifts its emphasis toward its higher-margin fragrance business.
As part of the move, Coty is more closely integrating its Prestige Beauty and Mass Fragrance businesses. Together, fragrances now account for 69% of sales, and the company said the integration will allow it to better leverage scale across R&D, consumer insights, manufacturing, and distribution.
Coty shares rose 1% in premarket trading Tuesday.
The decision comes after the cosmetics maker forecast weaker quarterly sales last month, citing softer demand for its products. The company had previously directed significant investment into its U.S. mass beauty operations, but later adjusted its focus toward fragrances as competition in mass beauty intensified from lower-cost online brands.
The review will center on the $1.2 billion mass color cosmetics portfolio, which includes CoverGirl, Rimmel, Sally Hansen and Max Factor, along with the Brazil business, which generates nearly $400 million in revenue.
Coty said it will consider a range of options, including partnerships, divestitures, or spin-offs. The company also plans to consolidate all fragrance and scenting labels under one structure to strengthen the core business, while seeking steady expansion in cosmetics and skincare.
"This next phase of our transformation is about clarity and focus," CEO Sue Nabi said.
Gordon von Bretten, a Coty board member and former chief transformation officer, has been appointed president of the consumer beauty unit and will oversee the strategic review. He will also join Coty’s Executive Committee and take end-to-end responsibility for the company’s mass cosmetics, skin, and personal care businesses.
As part of the shake-up, Chief Brands Officer Stefano Curti and Chief Commercial Officer of Consumer Beauty Alexis Vaganay will leave their roles.
"This new structure will also drive renewed momentum and sharper focus for consumer beauty, positioning it to compete more effectively in the evolving beauty landscape," Nabi said.
Last month, Coty forecast a 6%–8% drop in first-quarter like-for-like sales, blaming weaker U.S. demand for beauty products. To offset the impact of President Trump’s 15% tariffs on European imports, the company said it will increase prices in its premium fragrance unit and shift some production onshore.
Coty expects product launches to help return sales to growth in the second half of the year.
