What is the outlook for COTY's earnings in Q3 2025?

**COTY's Q3 2025 earnings outlook appears cautious.** Here's why:

1. **Recent Performance**: COTY's recent financials show a decline in net revenue and adjusted EPS. In Q2 2025, net revenue was $1.669 billion, a 3% decline from the previous year, and the adjusted EPS was $0.11, down from $0.25 in the same period of the previous year.
2. **Strategic Moves**: The company has recently sold its 20% stake in SKKN by Kim to SKIMS, consolidating beauty and lifestyle ventures. The sale was likely to reduce debt and fund innovation across its broader brand collection.
3. **Market Conditions**: The beauty market has thrived post-pandemic, with strong demand for prestige and mass-market products. However, COTY's cautious retail orders and divestiture of the Lacoste fragrance license indicate a challenging retail environment.
4. **Product Launches**: COTY has seen success with premium fragrances and cosmetics, driven by higher pricing and strong demand. The company's focus on product launches and innovation could positively influence earnings if these products contribute significantly to revenue.
5. **Debt and Financing**: COTY's total debt stood at $3.459 billion, with financial net debt at $3.209 billion by the end of Q2 2025. The allocation of sale earnings from the SKKN by Kim stake towards reducing debt could impact financial flexibility in Q3 2025.

In conclusion, while COTY's strategic moves and product focus suggest potential for growth, the overall cautious market environment and financial positioning indicate a conservative outlook for Q3 2025 earnings.