Coty, Inc. is no stranger to reinvention. As one of the world’s largest beauty companies, it has weathered acquisitions, divestitures, leadership changes, and shifting consumer preferences. But in 2025, their next transformation feels more urgent and more uncertain.
The company recently announced the elimination of 700 positions as part of its “All-In to Win” initiative, an ambitious restructuring effort aimed at simplifying operations, scaling the business, and accelerating innovation. At the same time, reports surfaced that Coty may be exploring the sale of some business units, a move that suggests the company is reevaluating what it wants to keep, and what it might need to let go.
Against this backdrop, Coty’s financial behavior tells a deeper story. And right now, the numbers reveal a company caught between progress and pressure.
Payment patterns reveal some underlying strain
When we look at payment patterns, one of the metrics we focus on is Days Beyond Terms (DBT), which indicates how many days late a company pays its bills. When we examined Coty’s DBT trends over the last 12 months, we noticed some clear patterns in their payment behaviors.
Over the last 12 months, the industry average DBT hovered between 10 and 14. But Coty’s DBT has consistently been higher during that period – sometimes more than double the industry average.
For example, Coty’s DBT was 23 in April 2025, while the industry average DBT was 10.
But beyond the industry comparison, we also noticed that Coty’s DBT repeatedly spiked and dipped over the last 12 months. For example, its DBT nearly doubled from 13 in August 2024 to 25 in September 2024.
But then it dropped to 17 in October 2024, before it rose slightly to 19 in November 2024 and then fell to 14 in December 2024. But as it moved into 2025, the company’s slowly and steadily rose again to 16 in January and February 2025.
Its DBT then increased to 19 in March 2024 before it jumped to 25 in April 2025 and then dropped again to 18 in May 2025. These repeated patterns of the company’s DBT jumping up, then dropping down and once again jumping up indicate cash flow instability, leading to paying suppliers.
When we took a closer look at Coty’s aging outstanding bills, we could see some areas of concern. Between July and September 2024, Creditsafe data shows that a very small portion (no more than 2%) of its outstanding bills were 91+ days past due.
This is a good sign that, even when late payments were occurring, they weren’t excessively late. But in the last few months of 2024, it appears as though cash flow was becoming more strained with roughly 4-6% of its outstanding bills falling into the 91+ days past due category.
And there have been some instances in 2025 where aging outstanding bills have become more frequent. For instance, the number of outstanding bills that were 31-60 days past due jumped from 1.02% in January 2025 to 9.30% in February 2025.
And then, the number of outstanding bills that were 61-90 days past due jumped from 0.86% in February 2025 to 6.15% in March 2025. Meanwhile, the number of outstanding bills that were 91+ days past due more than tripled from 2.06% in April 2025 to 7.21% in May 2025.
This kind of inconsistency suggests cash flow strain. And when paired with headcount reductions, possible divestitures and stock underperformance – Coty’s shares fell 32% year-to-date as of June 2025 according to a recent Fashion Network article – it paints a picture of a company in a financially fragile state even as it attempts to streamline and stabilize.
Strategic moves or signs of distress?
While Coty continues to tout strong results in prestige fragrances and certain skincare categories, the broader picture is more complicated. The company’s March 2025 press release highlighted strong results for the first half of FY25, but investors haven’t been quick to reward the momentum.
In fact, Coty’s shares rallied only after reports in June suggested the company may be selling off assets, which could possibly be viewed as a needed course correction rather than a growth strategy.
These actions, along with the recent 700 job cuts, suggest that the company is in active triage mode. Streamlining operations is a prudent move when done from a position of strength.
But when paired with rising overdue payments and broader market headwinds, it can also signal a scramble to protect profitability in the face of mounting costs.
Tariff pressures could add fuel to the fire
One variable that could further complicate Coty’s path forward are the recent tariffs. With new import duties under discussion and continued uncertainty around trade policy, Coty may face rising costs for both raw materials and finished goods.
The company’s global supply chain could quickly become a liability if external pressures further tighten margins or delay production timelines.
This adds another layer of complexity to the transformation strategy. Even if Coty succeeds in reducing internal inefficiencies, external macroeconomic stressors may erode some of the expected benefits, unless offset by disciplined financial management.
Transformation is not a cure-all
To be clear, Coty is not without strengths. Its portfolio includes globally recognized brands and its emphasis on prestige categories aligns with broader consumer demand trends.
The “All-In to Win” initiative, if executed effectively, could simplify operations and create a leaner, more agile organization.
But transformation on paper doesn’t guarantee financial recovery. A closer look at Coty’s supplier payments reveals the company may be stretching to meet obligations, sometimes pushing invoices into aging bill categories that could damage long-term supplier relationships.
These aren’t isolated red flags, they’re indicators of strain that if unaddressed, could worsen over time.
What’s next?
As Coty continues to reshape its business, the path forward will depend on more than just cost-cutting or asset sales. To regain stability and trust the company will need to bring its payment behavior in line with industry standards, protect its supplier relationships, and resist the temptation to mask financial strain with short-term solutions.
If the next phase of Coty’s transformation is to succeed, it won’t be because of slogans or stock rallies. It will be because the company proved, through its operations and meeting obligations, that it can rebuild from the inside out.
In a press release, Sue Nabi, CEO of Coty, said:
"We are committed to building a stronger, more resilient Coty that is well-positioned for sustainable growth. When we first announced our All-in to Win Program in FY20, at the peak of COVID disruptions, our goal was to boost our margin profile and brand reinvestment firepower through a significantly lower fixed cost structure, supply chain simplification, procurement savings and strategic revenue management initiatives.
The successful implementation of our plans despite the very challenged macro backdrop generated over $700M of savings between FY21-FY24, with over 400 basis points of gross margin expansion, over 400 basis point of A&CP investment expansion, and 130 basis points of EBITDA margin expansion, all while delivering a very strong revenue CAGR of 13% LFL.
With the cyclical and structural changes in the beauty industry and the global economy in recent years, including the rapid acceleration of e-commerce, the consolidation of retail channels and customers, and the new ways of consumer brand discovery, Coty must once again adapt and evolve.
This next phase of our transformation program will further strengthen our operating model and simplify our fixed cost structure. We fully anticipate these changes will strongly position Coty to outperform the beauty market in the coming years, cementing our global leadership position in fragrances while expanding into certain growing and profitable beauty categories, all while steadily expanding our gross margins and EBITDA margins.”
