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Coty Bets Big on AI for Cost Savings
30 Nov
Summary
- Coty integrates AI for workflow automation and enhanced procurement.
- AI integration started in late November 2025, promising cost savings.
- Inventory normalization remains a key risk for Coty's growth.
- Coty's narrative projects $6.1 billion revenue by 2028.
- Fair value estimates for Coty range widely among experts.
In late November 2025, Coty announced a significant operational shift by integrating artificial intelligence tools across its business. This strategic move aims to automate workflows, enhance procurement processes, and deliver more personalized customer experiences. Early results from AI-driven efficiencies have already begun to show cost savings, with expectations for improved profit margins as these advanced technologies mature.
The company's investment narrative hinges on returning to growth and boosting margins, while navigating inventory headwinds and market competition. While AI adoption is a positive step for operational efficiency, the primary short-term catalyst remains the normalization of US retailer inventory and a consistent resumption of top-line growth. Persistent destocking and margin pressures pose the main risks if this recovery is delayed.
Coty's strategic review of mass color cosmetics, potentially leading to divestitures or partnerships, will be closely monitored alongside AI rollouts. Projections indicate $6.1 billion in revenue and $302.1 million in earnings by 2028, though fair value estimates vary widely, highlighting ongoing debate about the company's future trajectory.
