Total Revenue

–6% (from $1,385.6M in Q3 2024 to $1,299.1M in Q3 2025)

Total revenue declined by 6%, likely reflecting continued weakness in consumer demand and segmented performance issues similar to those seen in previous quarters, where challenges in both Prestige and Consumer Beauty segments began affecting growth. " "

Operating Income

From +$77.8M in Q3 2024 to –$280.4M in Q3 2025

Operating income suffered a dramatic reversal, plunging from a positive $77.8M to a loss of $280.4M. This steep decline suggests that structural cost pressures—such as increased asset impairment charges, restructuring expenses, and adverse currency effects—persisted from previous periods. " "

Net Income

Declined from a slight positive to –$405.7M; EPS turned to –$0.47

Net income deteriorated sharply, turning negative largely as a consequence of the operating challenges along with detrimental financial impacts like the reversal of equity swap benefits. This further underscores the ongoing pressure from the deteriorated operating performance. " "

Sales Declines in H1 FY26

FY 2026

no prior guidance

“Sales declines in H1 FY26 – driven by the Consumer Beauty division with the Color Cosmetics category under pressure” "

no prior guidance

Gradual Improvement

FY 2026

no prior guidance

“Gradual improvement in like-for-like trends over FY26, supported by big initiatives in Prestige fragrances” "

no prior guidance

Blockbuster Launch Impact

FY 2026

no prior guidance

“Launch of a new blockbuster Prestige fragrance in H1 FY26 expected to contribute to growth starting in Q1 FY26” "

no prior guidance

Tariff Impact

FY 2026

no prior guidance

“Estimated impact in the low EUR 100 million range, primarily affecting Prestige fragrances” "

no prior guidance

Pricing Strategy

FY 2026

no prior guidance

“Mid-single-digit price increases on Prestige fragrances in the U.S. during summer 2025” " "

no prior guidance

Consumer Beauty Division Outlook

FY 2026

no prior guidance

“Color Cosmetics expected to remain negative in FY26 while mass fragrances are projected to accelerate with high single-digit or double-digit growth” "

no prior guidance

Cost Savings Initiatives

FY 2026

no prior guidance

“$370 million in cost savings over the next two years – including $120 million from ongoing productivity and $130 million from new structural interventions” "

no prior guidance

EBITDA Margin Improvement

FY 2026

no prior guidance

“EBITDA margin improvement by 20 to 30 basis points annually, with a 70 basis point improvement expected in FY25” "

no prior guidance

Prestige Fragrance Growth & Innovation

In Q1 2025, executives discussed strong growth rates (7% growth, blockbuster launches, geographic expansion). " " " In Q2 2025, the focus was on the unique qualities, high-entry barriers, successful launches (e.g., Gucci Flora Orchid, BOSS innovations) and strategic market shifts. " " " Q4 2024 emphasized robust growth driven by targeted pricing and innovation (Burberry Goddess Intense, Chloé launches, etc.). " " " "

In Q3 2025, the emphasis remained on sustained growth with mid‐single‐digit price increases, geographic trends, and an abundant innovation pipeline with blockbuster launches planned for fiscal 2026. " " "

Consistent positive sentiment with a steady drive for innovation and premium pricing. The messaging remains bullish with continued emphasis on growth and a robust pipeline, reinforcing long‐term confidence.

Consumer Beauty & Color Cosmetics Challenges

Q1 2025 discussions focused on retailer inventory challenges, headwinds in color cosmetics, and the need for diversification (e.g., CoverGirl stabilization). " " Q2 2025 further elaborated on structural challenges, competitive pressures, and dependence on heritage versus indie brands. " " Q4 2024 highlighted U.S. market retail caution and regional differences, noting aggressive inventory management and promotional pressures. " " "

In Q3 2025, the challenges were again underscored with diverging market trends; consumer beauty (especially color cosmetics) remained under pressure while mass fragrances continued to perform strongly. "

Persistent concerns remain across periods. The focus has shifted toward mitigating these headwinds by reallocating resources to higher margin areas, although caution around U.S. channels and inventory pressures has remained consistent over time.

Strategic Cost Savings and Margin Improvement Initiatives

In Q1 2025, margin expansion was highlighted via a 200bps gross margin improvement and new demand planning initiatives. " " Q2 2025 outlined H1 gross margin gains (200bps improvement; EBITDA margin growth of 70–90bps) and detailed savings of $120 million. " " Q4 2024 emphasized productivity initiatives and targeted price increases, with a robust plan for continued margin improvement (mid-60s gross margin targets, productivity improvements). " "

Q3 2025 detailed a structured $370 million savings program with ongoing productivity initiatives, centralization of support functions, and the use of technology/AI for enhanced planning—all aimed at maintaining a 70bps EBITDA margin improvement in fiscal 2025 and beyond. " " "

Steady and positive momentum in cost and margin strategies. Structural initiatives and technology integration are new emphases that build on past progress, reinforcing financial discipline even amid market volatility.

Supply Chain Management & Tariff Mitigation Strategies

In Q1 2025, supply chain improvements were addressed through a new consolidated global demand planning hub and dual sourcing, while tariff mitigation was discussed via a diversified manufacturing footprint. " " " Q2 2025 had only indirect macro references and past supply chain challenges mentioned, whereas Q4 2024 did not address this topic explicitly.

Q3 2025 provided detailed strategies including proactive inventory buildup before tariffs, consolidation of demand planning into a single hub leveraging AI, dual-sourcing, potential shifts in production locations, and mid-single-digit price increases to offset tariff impacts. " " "

Increased focus and detail in the current period. While earlier periods mentioned supply chain management in broader terms, Q3 2025 exhibits a more comprehensive and proactive approach to mitigate tariff impacts and optimize sourcing strategies.

Retailer Inventory Management & Working Capital Concerns

Q1 2025 addressed retailer adjustments resulting in a gap between sell-in and sell-out, with initiatives like a global planning hub to ease these pressures. " " " Q2 2025 discussed the cautious inventory management by retailers, resulting in a sell-in slowdown and working capital pressures, especially in the U.S. and Asia. " " " " Q4 2024 highlighted cautious inventory practices in the color cosmetics channel and noted retailer focus on cash flow and volatility. " " "

In Q3 2025, management reiterated that retailers are tightening their inventory and cash management practices across both Consumer Beauty and Prestige divisions, driven by competitive pressures from efficient e-commerce players like Amazon. The trend is toward very lean inventories, necessitating adjustments in sell-in practices. "

Cautious sentiment persists as retailers continue to tighten inventory practices. While this consistent challenge is acknowledged across periods, recent calls show intensified focus on reconciling sell-in versus sell-out data and proactive planning, offering cautious optimism for stabilization later in the year.

International Market Expansion and Regional Performance

Q1 2025 emphasized geographic diversification with a focus on growth engine regions despite challenges in China and Travel Retail Asia. " " " Q2 2025 described resource shifts from Asia towards the U.S. and Europe, highlighting successes in emerging markets such as South Africa, Saudi Arabia, and Mexico. " " " Q4 2024 detailed expansion strategies for brands like Orveda, strong growth in Brazil, and long-term opportunities in markets such as China despite current challenges. " " " "

In Q3 2025, regional performance was discussed with mixed signals: strong performance in Europe and Latin America contrasted with pressures in the U.S. (especially in Consumer Beauty) and ongoing challenges in Asia due to low penetration. The creation of an English-speaking region for greater agility was also highlighted. " " " " "

Consistently strategic with mixed regional sentiment. While expansion into growth engine markets remains a focus, Q3 2025 reflects a nuanced view with strong performance in some regions and continued pressure in others. Overall, the strategy is resilient with adaptive regional approaches and structural reorganization to harness long‑term opportunities.

Accelerated Innovation & New Product Launches

Q4 2024 focused on reducing time-to-market (from 18–24 months to 6–9 months), with several high-profile launches (Burberry Goddess Intense, Marc Jacobs Daisy Wild, Adidas Vibes). " " " In Q1 2025, innovation was key in stabilizing core brands like CoverGirl and Rimmel, with emphasis on agile beauty initiatives and significant pipeline developments. " " " Q2 2025 reiterated the importance of innovation in Prestige and Consumer Beauty, citing successes like Gucci Flora Orchid and innovations on BOSS fragrances. " "

In Q3 2025, the focus shifted to an accelerated pipeline with blockbuster launches expected in fiscal 2026, alongside continuous emphasis on pricing and consumer engagement (e.g., influencer-led launches in Consumer Beauty). " " "

Highly positive and aggressive focus on innovation. The trend shows an increased acceleration in product launches and a streamlined innovation process, building on past successes to drive future growth. The sentiment is upbeat, with innovation seen as a key growth driver across categories.

E-commerce and Digital Channel Growth

Q4 2024 highlighted e-commerce growing at two times the pace of overall growth along with significant digital investments boosting earned media value (up 400% for key brands). " " Q1 2025 noted that online channels were expanding rapidly with notable market share gains by brands like Rimmel and CoverGirl, particularly on Amazon and retail platforms. " " Q2 2025 reinforced this narrative by reporting strong e-commerce performance and market share gains, especially for Consumer Beauty brands. " "

Q3 2025 did not include explicit commentary on e-commerce or digital channels, even though previous periods consistently underscored their importance as growth drivers.

Consistent and strong emphasis on digital growth in earlier periods, though Q3 2025 is silent on this topic. The overall strategy remains a critical growth pillar, suggesting that digital channels continue to underpin future growth despite not being discussed in the current period.

Financial Performance, Deleveraging, and Margin Expansion

Q1 2025 set the stage with ambitious deleveraging goals (targeting leverage below 2x–3x) and highlighted margin improvements (200bps gross margin gains, EBITDA margin improvement expectations). " " " " Q2 2025 reinforced this with a reported 200bps H1 gross margin expansion, EBITDA margin growth of 70–90bps, and a leverage ratio below 3x achieved. " " " Q4 2024 underscored free cash flow generation, margin expansion via pricing and productivity, and focused on sustainable margin growth despite challenging comps. " " "

In Q3 2025, while net revenue performance was noted as a challenge (especially in the U.S.), the focus remained on margin expansion through strategic cost savings, continued deleveraging achievements, and a target of a 70bps EBITDA margin improvement. There is cautious optimism for fiscal 2026 as issues with retailer dynamics are addressed. " " " "

Steady progression with cautious optimism. While revenue challenges persist, consistently strong emphasis on margin improvements and deleveraging is evident. Recent messaging highlights structural cost savings and margin discipline, indicating a confident, disciplined financial strategy amid market volatility.

Revised Long-Term Growth Targets and Market Uncertainty

Q1 2025 described medium-term beauty growth at 3%-5% with revised long-term growth targets (down to mid-single-digits) and acknowledged challenges in key regions like Asia. " " Q2 2025 stated that specific sales targets were no longer prudent given macro uncertainties, and instead, the focus shifted to outperforming the market despite volatility. " Q4 2024 did not explicitly discuss revisions but provided context on market dynamics and regional pressures. " " "

In Q3 2025, while no detailed long-term growth numbers were provided, management reiterated caution given macroeconomic uncertainties and transient declines (especially in Consumer Beauty), with expectations for gradual improvement later in the year. " "

A clear shift toward cautious expectations. The revised targets and discussions of market uncertainty signal a recalibration in outlook—from previous higher growth ambitions to more conservative, market-outperformance focused targets in light of global volatility. Management remains confident, but with more measured long‑term projections.