COTY

On August 19, 2026, Coty Inc. (NYSE:COTY)'s fiscal fourth-quarter net revenue rose 1.3% to $1.27 billion in the quarter ended June 30, beating the average analyst estimate for a 4.6% decline, Reuters reported. Bloomberg said the total included a 3% currency tailwind, and like-for-like revenue actually fell 1%, the seventh straight decline but the smallest in 18 months. Adjusted loss per share narrowed to 2 cents from 5 cents but still missed the 1-cent loss expected. Coty withheld full-year guidance and called fiscal 2027 a "transition year" amid the Gucci exit. Shares fell 7% in extended trading. Coty actually beat the revenue estimate that mattered most this quarter, yet withholding full-year guidance while rivals like Estée Lauder issue confident forecasts sent a clear signal to investors. Coty's beat points to real demand, not an easy comparison. It topped Bloomberg's $1.19 billion consensus and beat Reuters' 4.6% decline estimate, even before currency helped. Like-for-like revenue's 1% decline was also the smallest in 18 months, a "significant sequential improvement," Coty said. Coty Inc. (NYSE:COTY) also sits in the strongest-growing part of the beauty industry. Rival Estee Lauder's fragrance business posted double-digit organic growth in the same fiscal year, helping drive its full-year net sales up 5% to about $15 billion, the company reported. Prestige fragrance outgrowing the rest of beauty favors Coty's fragrance-heavy portfolio. Coty's cost program is delivering real, structural savings, not just cuts to survive one bad year. The "All-in to Win" initiative generated more than $250 million in productivity and fixed-cost savings in fiscal 2026, ahead of target, and underlying fixed costs fell 4% even as inflation rose, Coty said. That kind of structural discipline supports margin recovery even if revenue growth stays slow. Coty's balance sheet is strengthening too since free cash flow rose to $348.2 million in fiscal 2026 from $277.6 million, and total debt fell to $3.09 billion from $3.22 billion. That growing cushion funds restructuring internally rather than needing fresh capital. The Gucci exit itself brings in cash: $250 million at signing and $150 million more by September 2027. Coty will use this cash to pay down debt and fund internal restructuring while management pursues a strategic review of slower brands like CoverGirl and Rimmel. The headline beat shrinks once currency comes out. Reported revenue rose 1.3%, but that included a 3% currency benefit, Bloomberg said, and like-for-like revenue actually fell 1%, the seventh straight quarterly decline. The weakness was concentrated in the Middle East, Germany, and Central and Eastern Europe, where revenue fell $45.3 million year over year, Coty said. The Gucci exit could create a lasting earnings gap as Coty gives up a recovering brand and its future growth potential. Kering bought back the license early for $400 million and signed a 50-year master deal with L'Oréal to run global operations after Coty's transition period ends. Profitability moved the wrong way even as revenue stabilized since adjusted loss per share came in at 2 cents, wider than the 1-cent loss expected. Adjusted gross margin fell 140 basis points to 60.9%, and adjusted EBITDA dropped 26% to $93.6 million. Full-year net loss widened to $618.0 million from $381.1 million. Coty Inc. (NYSE:COTY) is also losing ground in a market that is otherwise growing. It is underperforming a growing beauty market. Prestige beauty grew about 6% and mass beauty about 5% in the second half of fiscal 2026, yet Coty's own sellout fell 1% in Prestige and 2% in Consumer Beauty over that period. That gap hit profitability directly: Consumer Beauty adjusted EBITDA fell 67% year over year in the fourth quarter, though it improved $32 million sequentially from the third quarter. Guidance disappointed more than the quarter itself. Coty withheld full-year forecasts and guided to just 11 to 13 cents in adjusted earnings, below the 14-cent estimate, while peers Estee Lauder and Elf Beauty gave confident outlooks. Investors typically read a withheld number as management's own uncertainty, which likely explains the 7% drop despite the beat. Coty Inc. (NYSE:COTY) was held by 32 hedge funds as of Q1 2026, down from 35. For comparison, larger rival Estée Lauder was held by 47. Coty Inc. (NYSE:COTY)'s fourth quarter shows improvement, but not enough yet. The revenue beat is real, though the basic business is still shrinking once currency and regional weakness are stripped out. Coty is losing share even in a growing category, with its weakest division's profitability collapsing. The 7% stock drop shows investors weighing execution risk, a stronger rival inheriting Gucci, and an unresolved portfolio review over one good quarter. While we acknowledge the potential of COTY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: BP p.l.c. (BP) vs. Shell plc (SHEL): Two Oil Majors Cash In on the Iran War, But Tell Different Stories and ArcelorMittal (MT) vs. Microsoft Corporation (MSFT): A Steel Giant Bets Its Future on Azure. Disclosure: None. This article is originally published at Insider Monkey.

Coty’s results for Q2 reflected a challenging environment, with the market reacting negatively to both margin pressures and a non-GAAP loss that missed Wall Street’s consensus. Management attributed the softness to a lag in sell-out performance compared to category peers and a transition from a historical sell-in focus toward driving true market share gains. Interim CEO Markus Strobel was candid about the need for change, stating, “Our objective is to drive sell-out and to drive market share,” and acknowledging that this shift would take time. The quarter was also marked by ongoing SKU rationalizations and operational adjustments aimed at reducing excess inventory and returns, particularly within the U.S. consumer business. Is now the time to buy COTY? Find out in our full research report (it’s free). Revenue: $1.27 billion vs analyst estimates of $1.2 billion (1.3% year-on-year growth, 5.7% beat) Adjusted EPS: -$0.02 vs analyst estimates of -$0.01 ($0.01 miss) Adjusted EBITDA: $93.6 million vs analyst estimates of $88.86 million (7.4% margin, 5.3% beat) Operating Margin: -3.4%, down from 1.2% in the same quarter last year Organic Revenue fell 1% year on year (beat) Market Capitalization: $2.35 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Filippo Falorni (Citi) asked about key performance indicators for the transition year and potential upside risks; CEO Markus Strobel stressed the focus on market share sell-out and stated that upside depends on the speed of adoption and external cost factors. Javier Escalante (Evercore ISI) inquired about the timing and impact of SKU rationalization and capital spending in the U.S. and Europe; Strobel explained the phased rollout of SKU reductions and shelf resets, noting early success in the U.S. and plans to replicate improvements in Europe. Anna Lizzul (Bank of America) questioned the promotional environment and strategic review timeline for Consumer Beauty; Strobel described a more surgical approach to pricing and reaffirmed the goal of completing the review by year-end, while allowing flexibility based on outcomes. Susan Anderson (Canaccord Genuity) asked what is driving U.S. consumer brand improvements; Strobel attributed gains to focused advertising and innovation in key franchises, while CFO Laurent Mercier cited renewed growth in Brazil and early progress in Europe. Stephen Powers (Deutsche Bank) pressed for details on mitigating the profit impact from the Gucci exit; Strobel outlined a “belt and suspenders” approach, combining growth in other brands with a comprehensive restructuring program to address fixed costs. In future quarters, the StockStory team will be watching (1) the rollout and traction of SKU rationalization and shelf resets across European brands, (2) the pace at which sell-out-focused initiatives translate into market share gains and reduced inventory swings, and (3) progress on cost reduction programs and the outcome of the Consumer Beauty strategic review. Key innovations in core franchises and the effectiveness of targeted marketing will also be important milestones. Coty currently trades at $2.66, down from $3.03 just before the earnings. Is there an opportunity in the stock? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Interested in Coty? Here are five stocks we like better. Fourth-quarter sales improved sequentially, with like-for-like revenue down 1%, better than Coty’s expected mid-single-digit decline. However, full-year like-for-like sales fell 5%, and Coty continued to underperform broader beauty-market growth. Profitability remained pressured: fourth-quarter adjusted gross margin fell 140 basis points, while adjusted EBITDA declined 26% year over year. Coty still generated more than $250 million in fiscal 2026 productivity savings and reduced net debt by nearly $840 million to $2.9 billion. Coty expects fiscal 2027 to be a transition year, with first-quarter sales projected to decline at a low- to mid-single-digit rate and EBITDA down in the low teens. The company is preparing for the Gucci Beauty license exit in fiscal 2028, using proceeds to reduce debt, invest in core brands and streamline costs. 3 Beauty Stocks Off to an Ugly Start—Can 1 Stage a Comeback? Coty (NYSE:COTY) said its fourth-quarter fiscal 2026 results exceeded its expectations, although the beauty company continued to report lower sales and profitability as it prepares for a transition year centered on portfolio simplification, cost reductions and investment behind core brands. Executive Chairman and Interim Chief Executive Officer Markus Strobel said the company’s fourth-quarter performance was “an encouraging step” toward more consistent execution, while acknowledging that the business remains below its targeted performance level. Coty plans to use fiscal 2027 to strengthen core franchises, streamline its organization and prepare for the exit of the Gucci Beauty license in fiscal 2028. → Looking Beyond CrowdStrike? 3 AI Security Stocks Stand Out Rebalancing in 2025: Here Are 3 Stocks to Buy Under $10 Chief Financial Officer Laurent Mercier said fourth-quarter like-for-like sales declined 1%, improving from prior trends and outperforming Coty’s expectation for a mid-single-digit decline. The result reflected stronger-than-anticipated customer orders in the U.S. across prestige fragrances and mass cosmetics, along with a smaller-than-expected effect from the Middle East conflict. The Middle East conflict reduced fourth-quarter total sales by slightly more than 1%, compared with Coty’s prior estimate of a 2% to 3% impact. For the full fiscal year, like-for-like sales fell 5%. → 3 Robotics Stocks Under $10: Value, Momentum, or Bet? Estée Lauder undergoes a profit makeover to swoon investors Prestige like-for-like revenue declined 0.5% in the fourth quarter, while prestige fragrance revenue fell 1%. Prestige cosmetics posted double-digit sales and sellout growth, supported by Kylie, Burberry and the early contribution from Marc Jacobs makeup. Coty cited momentum from launches including Boss Bottled Beyond, Cosmic Kylie Jenner Intense and Calvin Klein Euphoria Elixir. Consumer Beauty like-for-like sales declined 3% in the fourth quarter, but the company said trends improved sequentially. Sally Hansen returned to sales growth, while COVERGIRL’s sellout trends improved and Rimmel gained volume market share in the U.K. during the latest three-month period. Lifestyle fragrances remained pressured, though sales trends improved from earlier quarters. → Michael Burry Is Betting Against Palantir Again—Should Investors Care? Mercier said Coty’s sellout performance remained below broader beauty-market growth in both divisions during the second half of fiscal 2026. The prestige market grew approximately 6% in that period, while mass beauty grew about 5%. Coty’s prestige sellout declined 1% and Consumer Beauty sellout fell 2%. Adjusted gross margin was 60.9% in the fourth quarter, down 140 basis points year over year. For fiscal 2026, adjusted gross margin was 63%, down 190 basis points. Coty attributed the decline to lower-volume cost absorption, elevated excess and obsolescence in both divisions, and tariffs. Adjusted EBITDA fell 26% year over year in the fourth quarter and declined 22% for the full year. The company said top-line pressure, lower gross margins and the year-over-year effect of variable compensation weighed on earnings. Adjusted earnings per share, excluding the equity swap, were breakeven in the fourth quarter and $0.34 for the full fiscal year. Prestige adjusted EBITDA declined 17% in the quarter and 12% for the full year, though the division maintained a 20.5% adjusted EBITDA margin for fiscal 2026. Consumer Beauty adjusted EBITDA fell 67% year over year in the fourth quarter, reflecting lower sales, supply-chain cost under-absorption, excess and obsolescence, and tariff costs. However, Consumer Beauty EBITDA improved by $32 million sequentially from the third quarter. Coty’s All-in to Win program generated more than $250 million in productivity and fixed-cost savings during fiscal 2026, ahead of its target. Underlying fixed costs fell 4% year over year despite inflation, the company said. Coty expects to accelerate savings initiatives in fiscal 2027 as it further rightsizes its cost structure. Despite a decline of more than $200 million in fiscal 2026 EBITDA, Coty generated $348 million in free cash flow, up roughly $70 million from the prior year and above its guidance. The company attributed the result to working-capital discipline, lower cash bonuses, a $34 million reduction in cash interest paid and $25 million lower capital expenditures. Net debt stood at $2.9 billion at the end of fiscal 2026, down nearly $840 million year over year. That balance did not include the first tranche of proceeds from Coty’s Gucci agreement received in July. The company exited the year with leverage of about 3.4 times and continues to target leverage of roughly two times over time. For the first quarter of fiscal 2027, Coty expects like-for-like revenue to decline by a low- to mid-single-digit percentage. Foreign exchange is expected to be neutral. The company forecast an adjusted gross-margin decline of approximately 50 to 100 basis points and an adjusted EBITDA decline in the low-teens percentage range. Adjusted EPS, excluding the equity swap, is expected to be $0.11 to $0.13 per share. Coty expects more than $300 million in free cash flow during the first half of fiscal 2027. The company did not provide full-year guidance, citing the early stage of its Coty.Curated strategy, uneven quarterly performance and its ongoing strategic review. Strobel said Coty is planning for Gucci Beauty to leave its portfolio by fiscal 2028. Under its agreement with Kering, Coty received $250 million at signing and expects another $150 million by Sept. 30, 2027, in addition to inventory proceeds. Gucci Beauty represents a low-double-digit percentage of Coty’s total revenue and has profitability broadly in line with the Prestige division, according to the company. Coty intends to use the proceeds to reduce debt, invest in core prestige brands and fund organizational optimization. It is developing a fixed-cost savings program expected to begin in the second half of fiscal 2027, targeting its go-to-market structure, manufacturing and distribution footprint, organizational layers and central functions. The company is also planning larger innovation efforts around brands including Burberry, Hugo Boss, Calvin Klein, Marc Jacobs, Chloé and Kylie, alongside launches in Etro, Swarovski and Marni fragrances. Coty said its objective is to return the underlying portfolio excluding Gucci to growth in fiscal 2028, moderate the mechanical EBITDA decline associated with the Gucci exit, and resume profit recovery in fiscal 2029 and beyond. Coty Inc is a multinational beauty company specializing in the development, manufacturing and marketing of fragrances, color cosmetics and skin and body care products. Established in 1904 by François Coty in Paris, the company has grown through a blend of organic innovation and strategic acquisitions to become one of the leading players in the global beauty industry. Coty's portfolio encompasses a broad range of consumer and luxury brands, reflecting its commitment to catering to diverse consumer preferences and market segments. The company's product offerings span three main divisions: Coty Luxury, Coty Consumer Beauty and Coty Professional Beauty. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Coty Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Fiscal Period: Fourth quarter fiscal 2026, with results discussed on August 20, 2026. Revenue: Financial results for the fourth quarter fiscal 2026 were discussed, with specific revenue figures detailed in the company's press release and prepared remarks. Non-GAAP Adjustments: Financial results and expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the company's release. Warning! GuruFocus has detected 3 Warning Sign with COTY. Is COTY fairly valued? Test your thesis with our free DCF calculator. Release Date: August 20, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Coty Inc (NYSE:COTY) is seeing strong early traction in its U.S. consumer beauty business, with CoverGirl and Sally Hansen significantly closing the sellout gap versus the market, and Sally Hansen now growing ahead of the market in value. The company has successfully renegotiated the Gucci license exit on favorable terms, securing full compensation for a year of profit and cash, funds for debt reduction and restructuring, and a solution for inventory. Coty Inc (NYSE:COTY) is implementing a disciplined 'Color the Future' program, focusing on fewer, more powerful innovations and reducing SKUs by 20%, which is expected to reduce returns and obsolescence, boosting EBITDA over time. The company is shifting its incentive structure to prioritize market share and sellout, aligning the organization with a more sustainable, consumer-driven growth strategy. Coty Inc (NYSE:COTY) is seeing a recovery in Brazil, with the market growing and the company regaining share, supported by strength in mass body and skincare. The company is investing in activity-building advertising for key franchises like CoverGirl's Simply Ageless and Lash Blast, and Sally Hansen's InstaDrive, which is driving improved sellout performance. Coty Inc (NYSE:COTY) is planning a comprehensive restructuring program to offset the impact of the Gucci departure, with a 'belts and suspenders' approach combining cost savings and growth initiatives. The company is leveraging travel retail as a strategic channel for brand image and launch visibility, which is currently growing nicely. Coty Inc (NYSE:COTY) is targeting fiscal 2027 EBITDA and free cash flow close to fiscal 2020 levels, with a clear framework to improve sellout and profitability. The company is rolling out successful U.S. interventions to European brands like Rimmel, Max Factor, and Bourgeois, with early positive signs in the UK. Coty Inc (NYSE:COTY)'s sellout has been trailing below the category for the last couple of quarters, leading to lower sell-in and operational problems. The company's fiscal 2027 is characterized as a 'transition year' with expectations of similar trends in Q1, indicating continued challenges ahead. Coty Inc (NYSE:COTY) faces uncertainty in the Middle East and oil price volatility, which could impact profitability, despite some potential upside from lower oil prices. The company is still awaiting a potential tariff refund of about $30 million, which is uncertain and could affect financial results. Coty Inc (NYSE:COTY) has not yet implemented its improvement program in European consumer brands, which are lagging behind the U.S., and the timeline for improvement is uncertain. The promotional environment remains elevated, with competitors taking pricing actions that could pressure margins. Coty Inc (NYSE:COTY) is experiencing a decline in EBITDA, partly due to returns and obsolescence in the consumer beauty business, which will take time to resolve. The strategic review of the consumer beauty business is a complex process with interdependencies, and the deadline of calendar 2026 is a strong aspiration but not guaranteed. The company's innovation has not been incremental enough, failing to create a halo effect on total business, as seen with the Boss Bond & Beyond launch. Coty Inc (NYSE:COTY) faces the risk of losing shelf space if sellout does not improve, despite efforts to maintain stable shelf presence. Q: Can you provide more detail on the internal KPIs you are targeting for the fiscal '27 transition year, and what are the potential sources of upside and risks to your outlook? A: Markus Strobel, Executive Chairman and Interim CEO, stated that the primary internal KPI is driving sell-out and gaining market share, a shift from the organization's traditional sell-in focus. He expects the sell-out gap versus the market to persist in Q1 but aims to improve substantially afterward through stronger innovation and disciplined spending. The pace of this improvement is the main swing factor. On EBITDA, the company has budgeted for $20-30 million in costs related to oil prices between $90-100, which could be a source of upside if prices moderate. Additionally, a potential $30 million tariff refund and ongoing productivity savings offer further upside. Q: Could you elaborate on the performance of the Consumer Beauty business in EMEA excluding the Middle East, and what is the strategy for the smaller European brands? Also, what does the SKU reduction and CapEx spending mean for the U.S. business, specifically CoverGirl, and how are shelf resets shaping up for the fall? A: Markus Strobel explained that the "Color the Future" performance improvement program, which includes a simpler lineup and more powerful innovation, was first implemented in the U.S. for brands like CoverGirl and Sally Hansen, where it has shown great traction and narrowed the gap versus the market. This program is now being rolled out to European brands like Max Factor and Bourgeois, which have not yet seen these interventions. Regarding SKUs, the 20% reduction on shelf is not expected to materially impact sales, as it will free up space for faster-turning items. On shelf resets, the company has managed to maintain stable shelf space overall, seeing some gains and losses, but does not foresee a significant risk. Q: Can you comment on the current promotional environment and the competitive actions you are seeing, particularly in the mass and prestige categories? A: Markus Strobel noted that pricing competition in the prestige category was intense during the key holiday season (October to December) but has since abated. In the consumer business, companies are moving away from broad-based price changes to a more surgical approach, determining which SKUs can support higher prices. He believes this differentiation will help stabilize the pricing and promotional environment in the coming months. Q: Is the end of calendar 2026 a hard deadline for the strategic review of the Consumer Beauty business, or is there flexibility? A: Markus Strobel affirmed that completing the review by calendar '26 is a "very strong aspiration." However, he acknowledged flexibility, stating that if waiting another month would yield a significantly better result, they would do so. The intent is to finish by then, but value creation remains the ultimate priority. Q: What is driving the improvement in the U.S. Consumer Beauty business for CoverGirl and Sally Hansen, and how does the international performance compare? A: Markus Strobel attributed the U.S. improvement to increased investment in brand-building advertising rather than promotions. The company has returned to national television for CoverGirl, focusing on core franchises like Simply Ageless and Lash Blast, and for Sally Hansen, with its InstaDry innovation. This focused spending strategy is driving the improved sell-out gap. Internationally, Brazil has returned to growth, contributing to the skincare performance, while Europe is lagging as the program has not yet been fully implemented there, though early signs from Rimmel in the U.K. are positive. Q: What gives you confidence in the goal of returning the underlying portfolio, excluding Gucci, to growth in fiscal '28, and what are the key building blocks to achieve this? A: Markus Strobel highlighted two critical points: a focus on big brand franchises like Burberry and Hugo Boss, which have no excuse not to grow, and creating more incremental innovation that generates a halo effect on the total business. He cited the launch of Boss The Scent for Her as an example of creating incremental female business that also boosts the male line. The strategy involves concentrating investments in markets where the company has a right to win and ensuring innovation is constructed for incrementality and overall brand halo. Q: Regarding the plan to mitigate the impact of the Gucci departure in fiscal '28, how much of the planning is dependent on portfolio growth versus restructuring costs? A: Markus Strobel described a "belts and suspenders" approach. The plan involves growing existing brands and launching new ones like Swarovski, but the intention is for the cost savings and restructuring program alone to be sufficient to cover the gap. This ensures that even if growth initiatives underperform, the financial impact is mitigated. More details on the restructuring program will be shared in the coming months. Q: Can you provide an update on the strategic review of Consumer Beauty, and is a cleaner exit for the Brazil business more likely than the U.S. business? A: Markus Strobel reiterated that while the Brazil business might be easier to isolate, the company is not necessarily looking for the easiest path but the best solution that creates the most value. The review is being conducted on the total consumer business, including all its parts. Q: With the Gucci exit, what specific actions will be taken to minimize overhead challenges, given that some costs may not transfer to L'Oreal? A: Markus Strobel expressed satisfaction with the deal with L'Oreal, which achieved objectives of full compensation for a year of profit and cash, debt reduction, and solving inventory questions. For fixed cost savings, the company is planning a serious restructuring program covering its go-to-market setup, manufacturing and distribution network, continuous de-layering of the organization, and right-sizing central functions to reflect the initially lower sales base. Q: How are you ensuring that the new market share KPI in the fiscal '27 incentive structure does not inadvertently encourage chasing volume through promotions, and what guardrails are in place? A: Markus Strobel explained that while market share is a significant KPI, the bonus structure also includes strong sales and EBITDA components. This calibration prevents a sole focus on promotional volume, which would hurt profitability. The goal is to align sell-in with sell-out growth to avoid the wide inventory swings seen in the past. Q: How should we think about the improvement in the Consumer Beauty business through the first half of fiscal '27, and what is the timeline for the SKU reduction? A: Markus Strobel stated that the investment in advertising and the implementation of the improvement program in Europe will proceed regardless of the strategic review outcome, as it For the complete transcript of the earnings call, please refer to the full earnings call transcript.

For the quarter ended June 2026, Coty (COTY) reported revenue of $1.27 billion, up 1.3% over the same period last year. EPS came in at -$0.02, compared to -$0.05 in the year-ago quarter. The reported revenue represents a surprise of +6.42% over the Zacks Consensus Estimate of $1.19 billion. With the consensus EPS estimate being -$0.01, the EPS surprise was -100%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how Coty performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Geographic Revenues- Americas: $554.7 million compared to the $534.66 million average estimate based on two analysts. The reported number represents a change of +8.5% year over year. Geographic Revenues- Asia Pacific: $185.6 million compared to the $171.51 million average estimate based on two analysts. The reported number represents a change of +11.1% year over year. Geographic Revenues- EMEA: $528.9 million compared to the $542.89 million average estimate based on two analysts. The reported number represents a change of -7.9% year over year. Net Revenues- Prestige: $771.8 million compared to the $733.89 million average estimate based on four analysts. The reported number represents a change of +1.5% year over year. Net Revenues- Consumer Beauty: $497.4 million versus the four-analyst average estimate of $459.7 million. The reported number represents a year-over-year change of +1.1%. Adjusted Operating Income- Prestige: $60.2 million compared to the $58.31 million average estimate based on two analysts. Adjusted Operating Income- Consumer Beauty: $-20.7 million compared to the $-14.76 million average estimate based on two analysts. View all Key Company Metrics for Coty here>>> Shares of Coty have returned -0.4% over the past month versus the Zacks S&P 500 composite's +3.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Coty (COTY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Despite losing its crown jewel Gucci Beauty license, Coty ended the fiscal year on a positive note, topping Wall Street revenue estimates. Coty’s net revenue rose 1 percent to $1.26 billion in the three months ended June 30. Analysts had forecast $1.19 billion. More from WWD Nike, Target, Amer Sports + More Companies Have Gotten Tariff Refunds - Will Shoppers See Them Too? The Estée Lauder Cos. Reports 6 Percent Sales Increase in Q4 Salomon Sees North American Growth as Arc'teryx Partners With Dick's Sporting Goods Within that, prestige net revenues rose 1 percent to $771.8 million, representing 61 percent of the company’s total sales. Consumer beauty net revenues also increased 1 percent to $497.4 million. Nevertheless, the group reported a net loss of $144.3 million, compared to a net loss of $72.1 million in the prior year. Adjusted losses per share narrowed to 2 cents, but were greater than Wall Street forecasts for a 1-cent loss. Markus Strobel, executive chairman and interim chief executive officer, said: “We were pleased to return to reported sales growth, with Q4 sales up 1 percent year-over-year and a significant sequential improvement in our like-for-like trends to down 1 percent, despite incurring an estimated 1 percent headwind to sales from the Middle East conflict. It’s encouraging to see closer alignment between our sell-in and sell-out. However, we are not content with our sell-out performance, which remains below market levels in both divisions, and steadily closing that gap remains a clear priority across the organization.” While the company did not provide full-year guidance for 2027, he alluded to the future post-Gucci. In July, it was revealed that Gucci and L’Oréal had entered into a 50-year exclusive beauty license, one year ahead of schedule, as the Italian brand’s fragrance and beauty license was meant to expire with Coty Inc. on June 30, 2028. “While the Gucci Beauty license exit will result in a step-down in sales and profit in FY28, we are developing plans to help moderate the impact,” Strobel continued. “These plans include accelerating our core brands; maximizing the contribution from new portfolio additions, including makeup under Marc Jacobs Beauty and fragrances under Swarovski, Etro, and Marni; and lowering our cost structure through a significant fixed cost reduction program. These actions are designed to mitigate the FY28 impact and position Coty to accelerate growth across our core portfolio and drive profit expansion in FY29 and beyond,” Strobel said. The earnings came as Coty tapped Soraya Benchikh as chief financial officer, effective Sept. 1, succeeding longtime CFO Laurent Mercier. The appointment follows the new operating structure Coty put in place on July 2, which brought commercial decision-making closer to the markets the company serves and combined research and development and supply chain into a single function. Strobel said: “Soraya is a seasoned global executive with a strong track record of financial and operational leadership, and she is the right leader for Coty’s next phase. As we welcome her to Coty, I would like to sincerely thank Laurent for his leadership in strengthening Coty’s financial foundation over the past five years. He shaped a better finance organization, built greater financial discipline, and created a clear financial roadmap.” Benchikh most recently served as CFO of British American Tobacco, after spending nearly four years at Diageo. Benchikh said: “Coty has one of the strongest portfolios in global beauty, and Laurent leaves the finance function in great shape. I’m joining at a pivotal moment in Coty’s transformation, with a clear strategy and a real opportunity to accelerate it alongside Markus and the team. My focus will be strengthening the balance sheet, sharpening capital allocation, and helping drive the next phase of sustained value creation.” Best of WWD Best Timeless Beauty From Oscars Red Carpets Over the Years Best Oscars Red Lips Through the Years Which Celebrity Brands Are Next for a Major Deal? Lady Gaga, Beyonce and More Possible Contenders for the Next Corporate Prize Sign up for WWD's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.

Q4 Results Ahead of Expectations, Including Sales Growth of 1% Growth in FY26 Operating Cash Flow to $538 million and Free Cash Flow to $348 million, Despite Lower Profit Coty.Curated Sets Clear Strategic Framework to Strengthen Business Fundamentals NEW YORK, August 19, 2026--(BUSINESS WIRE)--Regulatory News: Coty Inc. (NYSE: COTY) (Paris: COTY) ("Coty" or "the Company") today announced its results for the fourth quarter of fiscal year 2026, ended June 30, 2026. Coty delivered Q4 and FY26 sales, profit, and cash flow ahead of expectations, supported by cost control and the convergence of sales and sell-out. "We closed FY26 on a stronger note, delivering sales and profit ahead of our targets, growing free cash flow even in the face of business headwinds, all while establishing a clear strategic framework and taking decisive action to steadily strengthen our core business in FY27 and beyond," said Markus Strobel, Executive Chairman and Interim Chief Executive Officer. "We were pleased to return to reported sales growth, with Q4 sales up 1% year-over-year and a significant sequential improvement in our like-for-like (LFL) trends to down 1%, despite incurring an estimated 1% headwind to sales from the Middle East conflict. It's encouraging to see closer alignment between our sell-in and sell-out. However, we are not content with our sell-out performance, which remains below market levels in both divisions, and steadily closing that gap remains a clear priority across the organization. "Our Coty.Curated strategic framework has entered the execution phase, with tangible actions already taken and further progress ahead. We began rightsizing our commercial organization and Consumer Beauty R&D and global brand marketing functions to enhance agility and accountability. We have also incorporated concrete market share targets into our global incentive program. Our FY27 big bets have been identified, and we will support them with amplified advocacy and consumer engagement programs, while also optimizing the visibility and recommendation of our brands across AI platforms. In Consumer Beauty color cosmetics, we are simplifying the innovation calendar and SKU base, and shifting resources toward fewer, higher-impact launches and proven hero products. We will execute these actions with discipline to minimize the impact on sales. "Over the last three quarters, we have advanced our strategic objectives of simplifying our portfolio, sharpening our focus on the core of our business, and reducing our debt balance. In December 2025, we monetized our remaining stake in Wella for $750 million. In July 2026, we announced an agreement to sell the Gucci Beauty license back to Kering approximately one year ahead of its expiration for $400 million, plus additional proceeds from inventory. These favorable outcomes are fully consistent with our objectives, as we deploy the proceeds toward debt reduction, reinvestment in Coty's core prestige fragrance and beauty brands, and optimization of our organizational structure. "While the Gucci Beauty license exit will result in a step-down in sales and profit in FY28, we are developing plans to help moderate the impact. These plans include accelerating our core brands; maximizing the contribution from new portfolio additions, including makeup under Marc Jacobs Beauty and fragrances under Swarovski, Etro, and Marni; and lowering our cost structure through a significant fixed cost reduction program. These actions are designed to mitigate the FY28 impact and position Coty to accelerate growth across our core portfolio and drive profit expansion in FY29 and beyond. "In sum, our Q4 results provide early signs of stabilization, although the recovery will not be linear. FY27 will be a transition year as we strengthen our core business and continue shaping a simpler, more focused Coty, factoring in both the Gucci exit by FY28 and final portfolio decisions related to our strategic review of Consumer Beauty by the end of CY26. We have important strengths to build on, including leading brands, strong category positions, solid cash generation, and a differentiated end-to-end global platform. We are confident that our focused Coty.Curated framework will unlock Coty's significant potential and steadily translate into shareholder value in the years ahead." Three Months Ended June 30, 2026, Summary Results For the three months ended June 30, 2026, compared to the three months ended June 30, 2025: Net revenues of $1,269.2 million increased 1% on a reported basis and included a 3% benefit from foreign exchange (FX). On a LFL basis, net revenues declined 1%, which included an estimated 1% headwind from the conflict in the Middle East. Prestige net revenues of $771.8 million, representing 61% of the Company's total sales, increased 1% on a reported basis and included a 2% benefit from FX. On a LFL basis, Prestige net revenues declined 0.5%, which included an estimated 1.5% headwind from the conflict in the Middle East. Consumer Beauty net revenues of $497.4 million, representing 39% of the Company's total sales, increased 1% on a reported basis and included a 4% benefit from FX. On a LFL basis, Consumer Beauty net revenues declined 3%, which included an estimated 1% headwind from the conflict in the Middle East. Reported gross margin of 60.9% decreased 140 basis points year-over-year, driven by lower cost absorption due to reduced volumes, elevated excess and obsolescence charges in both divisions and the impact from tariffs. Adjusted gross margin of 60.9% decreased 140 basis points year-over-year. Reported operating loss of $42.7 million deteriorated from reported operating income of $15.5 million in the prior year. Reported operating loss margin of 3.4% compared to reported operating margin of 1.2% in the prior year. Adjusted operating income of $39.5 million decreased from $67.7 million in the prior year. Adjusted operating margin of 3.1% contracted by 230 basis points year-over-year. Reported net loss of $144.3 million compared to reported net loss of $72.1 million in the prior year. Reported net loss margin of 11.4% compared to reported net loss margin of 5.8% in the prior year. Adjusted net loss of $13.4 million improved from adjusted net loss of $44.9 million in the prior year. Adjusted net loss margin of 1.1% compared to adjusted net loss margin of 3.6% in the prior year. Reported and adjusted net loss included a $10.0 million negative impact from the mark-to-market on the equity swap, compared to a $59.6 million negative impact from the mark-to-market on the equity swap in the prior year quarter. Adjusted EBITDA of $93.6 million decreased 26% from $126.7 million in the prior year primarily reflecting lower gross profit. Adjusted EBITDA margin of 7.4% decreased by 270 basis points. Reported loss per share of $0.16 compared to reported loss per share of $0.08 in the prior year. Adjusted loss per share of $0.02 improved from adjusted loss per share of $0.05 in the prior year. Reported and adjusted loss per share included a $0.02 negative impact from the mark-to-market on the equity swap, compared to a $0.07 negative impact from the mark-to-market on the equity swap in the prior year quarter. Cash flow from operating activities of $116.0 million compared to $83.2 million in the prior year period. Free cash flow totaled $72.6 million, compared to $34.9 million in the prior year period. Total debt of $3,088.2 million as of June 30, 2026 decreased from $3,216.2 million as of March 31, 2026, yielding a total debt to net loss ratio of 5.2x. Financial net debt of $2,912.1 million as of June 30, 2026 decreased from $2,959.1 million as of March 31, 2026, resulting in a financial leverage ratio (net debt to adjusted EBITDA) of 3.4x. Twelve Months Ended June 30, 2026, Summary Results For the twelve months ended June 30, 2026, compared to the twelve months ended June 30, 2025: Net revenues of $5,806.6 million decreased 2% and included a 4% benefit from FX. On a LFL basis, net revenues decreased 5%. Prestige net revenues of $3,805.8 million, representing 66% of the Company's total sales, decreased slightly on a reported basis and decreased 4% on a LFL basis. Consumer Beauty net revenues of $2,000.8 million, representing 34% of the Company's total sales, decreased 3% on a reported basis and 7% on a LFL basis. Reported gross margin of 62.9% decreased 190 basis points year-over-year, reflecting supply chain cost under-absorption due to lower sales, particularly in Consumer Beauty; the impact from tariffs; a more promotional environment in the first half of the year; and elevated excess and obsolescence charges. Adjusted gross margin of 63.0% decreased 190 basis points year-over-year. Reported operating loss of $81.5 million compared to reported operating income of $241.1 million in the prior year. Reported operating loss margin of 1.4% declined from reported operating margin of 4.1% in the prior year. Adjusted operating income of $626.7 million declined 27% from $852.9 million in the prior year. Adjusted operating margin of 10.8% reflected a 370 basis point decline. Reported net loss of $618.0 million compared to reported net loss of $381.1 million in the prior year. Reported net loss margin of 10.6% deteriorated from reported net loss margin of 6.5% in the prior year. Adjusted net income of $185.1 million decreased slightly from $188.8 million in the prior year. Adjusted net income margin of 3.2% was flat year-over-year. Reported net loss and adjusted net income included a $115.8 million negative impact from the mark-to-market on the equity swap, compared to a $248.1 million negative impact from the mark-to-market on the equity swap in the prior year. Adjusted EBITDA of $846.9 million decreased 22% year-over-year from $1,081.7 million primarily driven by lower sales and gross profit. Adjusted EBITDA margin of 14.6% reflected a 380 basis point decline. Reported loss per share of $0.70 compared to reported loss per share of $0.44 in the prior year. Adjusted earnings per share (EPS) of $0.21 compared to $0.22 in the prior year. Reported loss per share and adjusted EPS included a $0.13 negative impact from the mark-to-market on the equity swap, compared to an $0.28 negative impact from the mark-to-market on the equity swap in the prior year. Cash flow from operating activities of $537.8 million compared to $492.6 million in the prior year period. Free cash flow totaled $348.2 million, compared to $277.6 million in the prior year period. Noteworthy Developments Coty announced an agreement with Kering for the early transition of the Gucci Beauty license. As part of the agreement, Coty received $250 million in cash at signing and will receive an additional $150 million no later than September 30, 2027, of which up to $30 million is contingent on certain criteria. Coty has also agreed to sell to Kering an amount of Gucci Beauty inventory sufficient to support the transition. Under the terms of the agreement, Coty will continue to operate the Gucci Beauty brand through at least June 30, 2027, ending the license approximately one year ahead of the original license term. Coty continues to implement its Coty.Curated framework to support sharper focus and stronger execution across the portfolio. Coty's Prestige strategy continues to be anchored by key brands such as Burberry, Hugo Boss, Calvin Klein, Marc Jacobs, Chloé, Davidoff, and Kylie Cosmetics. Major FY26 launches continued to perform well, including BOSS Bottled Beyond, Cosmic by Kylie Jenner Intense, and Calvin Klein Euphoria Elixirs. Coty's online launch of makeup under Marc Jacobs Beauty is off to a strong start, with an exceptional consumer response and online sell-out at Sephora ahead of targets. Coty continues to see early progress in Consumer Beauty, with sell-out performance in the U.S. improving for CoverGirl and Sally Hansen. In the U.S., Sally Hansen is now outperforming the category in units, while CoverGirl has narrowed the gap versus the category significantly in both value and units. Pipeline for FY27 and Beyond Prestige Plans Building on the success of BOSS Bottled Beyond with the FY27 launch of BOSS Bottled Beyond for Her, designed to extend the franchise into the female fragrance segment and support the core franchise Strengthening the iconic Burberry Goddess franchise following the recent launch of Goddess Amber Vanilla, as well as relaunching a brand new, impactful campaign and incremental innovation behind one of Burberry's core franchises Expanding Marc Jacobs Beauty makeup beyond online distribution into hundreds of Sephora stores across the U.S. and in Travel Retail beginning in September Building on Kylie Cosmetics' strong multi-category growth through the launch of the Mood Stones fragrance collection and new lip kits Elevating Calvin Klein fragrances by amplifying the Euphoria Elixirs launch and leaning into renewed interest in 1990s nostalgia, leveraging CK One's position as one of the era's defining fragrances Advancing additional key launches across several core brands, alongside the planned debut of Etro fragrances in the second half of FY27 and Swarovski fragrances in CY27 Consumer Beauty Plans Advancing Color the Future through fewer, higher-impact launches in FY27 including CoverGirl's TruBlend Sun & Sculpt Bronzing Glow Serum, Rimmel's Oh My Gloss! Slip Stick, Max Factor's Lasting Blur and Sally Hansen's Miracle Gel and INSTA-DRI seasonal shade stories Introducing Future of Scenting to sharpen focus across the mass-fragrance portfolio and drive more consistent performance, including continuing to scale adidas fragrances globally Outlook Consumer demand for beauty remains resilient, with continued growth in fragrances and cosmetics, although consumers are becoming increasingly selective in their purchasing decisions. Coty continues to advance its Coty.Curated strategic framework, focusing on core brands and markets, reducing portfolio complexity, increasing agility through organizational simplification, and identifying savings opportunities across the P&L to support increased investment in consumer engagement while also protecting profitability. Coty expects 1Q27 LFL revenue to decline by a low- to mid-single-digit percentage. While sell-out trends for both divisions are expected to be broadly consistent with the trends in the second half of FY26, the timing of customer orders and prior year comparisons are expected to contribute to fluctuations in year-over-year sales trends. On a reported basis, Coty expects FX to have a neutral impact on revenue in the quarter. Adjusted gross margin in 1Q27 is expected to decline by approximately 50 to 100 basis points year-over-year, reflecting cost absorption headwinds from lower shipments, partially offset by productivity initiatives and procurement actions. Coty anticipates 1Q27 adjusted EBITDA to decline by a low-teens percentage, representing a sequential improvement from the more significant declines in the second half of FY26. This is expected to result in adjusted EPS, excluding the equity swap, of $0.11 to $0.13 per share. Supported by the seasonally strong business dynamics in the first half, as well as continued disciplined capital expenditure and working capital management, Coty expects free cash flow for the first half of FY27 of over $300 million. FY27 is expected to be a transition year as Coty completes its strategic review and advances the early-stage implementation of Coty.Curated. Accordingly, at this stage Coty is providing guidance for Q1 and visibility into first-half free cash flow. Coty's Q1 EBITDA outlook reflects sequential improvement from year-over-year trends in the second half of FY26. The Company expects performance to strengthen progressively throughout FY27, supported by innovation, disciplined execution, cost savings, and strong cash flow generation. Overall, year-over-year EBITDA trends are expected to improve over the course of FY27, supported by ongoing productivity initiatives and cost discipline. Following the expected completion of the Company's strategic review by the end of CY26, and as implementation of Coty.Curated progresses, Coty expects to provide a broader outlook supported by greater visibility into Coty's growth and profitability trajectory. Fourth Quarter Fiscal 2026 Business Review by Segment Prestige Reported net revenues in the fourth quarter increased by $11.2 million year-over-year, primarily driven by an increase in Prestige cosmetics and fragrance sales, partially offset by lower skincare sales. Reported operating loss in the fourth quarter represented a year-over-year deterioration from reported operating income in the prior-year period, primarily due to top-line pressure from lower fragrance shipments, gross margin pressure from higher tariff costs and the resulting cost of goods sold (COGS) absorption headwinds from lower shipment volumes, and higher fixed costs compared to a prior year period that benefited from lower variable compensation. Consumer Beauty Reported net revenues in the fourth quarter increased by $5.6 million year-over-year, primarily driven by an increase in mass body and skincare sales, partially offset by lower mass color cosmetics sales. Reported operating loss in the fourth quarter widened year-over-year, primarily reflecting supply chain cost under-absorption from lower sales, increased excess and obsolescence, and higher tariff-related costs. Fourth Quarter Fiscal 2026 Business Review by Region Americas Reported net revenues in the fourth quarter increased by $43.5 million year-over-year, primarily driven by higher sales in the U.S., Brazil, and the regional Travel Retail channel, partially offset by lower sales in Canada. EMEA Reported net revenues in the fourth quarter decreased by $45.3 million year-over-year, primarily driven by lower sales in the Middle East, Germany, and Central and Eastern Europe. Asia Pacific Reported net revenues in the fourth quarter increased by $18.6 million year-over-year, primarily driven by higher sales in China, Southeast Asia, Australia and New Zealand, and the regional Travel Retail channel. Conference Call Coty Inc. will issue pre-recorded remarks on August 19, 2026, at approximately 4:45 PM (ET) / 10:45 PM (CET) and will hold a live question-and-answer session on August 20, 2026, beginning at 8:00 AM (ET) / 2:00 PM (CET). The pre-recorded remarks and live question-and-answer session will be available at http://investors.coty.com. The dial-in number for the live question-and-answer session is 1-800-343-5172 in the U.S. or 1-203-518-9856 internationally (conference passcode: COTY4Q26). About Coty Inc. Founded in Paris in 1904, Coty is one of the world's largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care. Coty serves consumers around the world, selling prestige and mass market products in over 120 countries and territories. Coty and our brands empower people to express themselves freely, creating their own visions of beauty; and we are committed to protecting the planet. Learn more at coty.com or on LinkedIn and Instagram. Forward Looking Statements Certain statements in this Earnings Release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company's current views with respect to, among other things, strategic planning, targets and outlook for future reporting periods (including the extent and timing of revenue, expense and profit trends and changes in operating cash flows and cash flows from operating activities and investing activities, as well as the Company's expectations for the timing, scope and impact of the exit from the Gucci Beauty license), the Company's future operations and strategy (including the ongoing refinement and implementation and related impact of its global business strategies), the Company's plans to evaluate its central organization, manufacturing and asset base, and certain market structures to adjust its scope and size for its future business, the Company's ongoing and future cost efficiency, optimization and restructuring initiatives and programs (including plans to develop a significant fixed-cost savings plan in connection with the exit from the Gucci Beauty license), the ongoing strategic review of the Company's consumer beauty business, including its mass color cosmetics business and associated brands and the Company's distinct Brazil business comprised of local Brazilian brands, the timing and outcome of such strategic review and any transactions related thereto and use of proceeds of any such transactions, expectations and/or plans with respect to joint ventures (including the timing and size of any distribution related to the Wella distribution rights), the Company's capital allocation strategy and payment of dividends (including suspension of dividend payments and the duration thereof and any plans to resume cash dividends on common stock or to continue to pay dividends in cash on preferred stock) and expectations for stock repurchases or investments, expectations with respect to licenses and/or portfolio changes, product launches, relaunches or rebranding (including the expected timing or impact thereof), plans for strengthening presence in certain categories, markets and channels, expectations for the impact, cost, timing and outcome of any future divestitures, expectations for synergies, savings, performance, cost, timing and integration of any future acquisitions, expectations for future cash flows, liquidity and borrowing capacity (including any refinancing or deleveraging activities), timing and size of cash outflows and debt deleveraging, the timing and magnitude of any "true-up" payments in connection with our forward repurchase contracts and plans for the settlement of such contracts, the timing and extent of any future impairments, expected synergies, savings, impact, cost and timing of the Company’s ongoing refinement and implementation of its global business strategies (including operational and organizational structure changes, operational execution and simplification initiatives, fixed cost reduction plans, continued process improvements and supply chain changes), the expected impact of geopolitical risks including the ongoing war in Ukraine and/or war in the Middle East on our business operations, sales outlook and strategy, expectations regarding the impact of tariffs (including magnitude, scope and timing) and plans to manage such impact, expectations of the impact of inflationary pressures and the timing, magnitude and impact of pricing actions to offset inflationary costs, expectations regarding economic conditions in Asia, consumer purchasing trends including in travel retail channels in the region and the related impact on sales, the expected impact of global supply chain challenges and/or inflationary pressures (including as a result of the war in Ukraine and/or the war in the Middle East (including the expected impact of elevated Brent crude oil prices), or due to a change in tariffs or trade policy impacting raw materials), and expectations regarding future service levels, inventory levels and excess and obsolescence trends (including as a result of our Coty.Curated framework), the expected impact, cost, timing and implementation of e-commerce and digital initiatives, expectations regarding the expanded use of artificial intelligence and advanced analytics in the Company's operations and the timing and impact thereof, the expected impact, cost, timing and implementation of sustainability initiatives (including progress, plans and goals), and the priorities of senior management. These forward-looking statements are generally identified by words or phrases, such as "anticipate", "are going to", "estimate", "plan", "project", "expect", "believe", "intend", "foresee", "forecast", "will", "may", "should", "outlook", "continue", "temporary", "target", "aim", "potential", "goal" and similar words or phrases. These statements are based on certain assumptions and estimates that we consider reasonable, but are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual events or results (including our financial condition, results of operations, cash flows and prospects) to differ materially from such statements, including risks and uncertainties relating to: the Company's ability to successfully implement its strategic priorities (including leveraging its leadership position and capabilities in global fragrances to fuel expansion and strengthen its presence in a limited number of structurally profitable and growing beauty categories and geographic markets at scale), achieve the benefits contemplated by its long-term objectives (including value creation, growth, profitability and debt deleveraging), and compete effectively in the beauty industry, in each case within the expected time frame or at all; the Company's ability to anticipate, gauge and respond to market trends and consumer preferences, which may change rapidly, and the market acceptance of new products, including new products related to the Company's prestige fragrance and prestige cosmetics portfolios, any relaunched or rebranded products and the anticipated costs and discounting associated with such relaunches and rebrands, and consumer receptiveness to the Company's current and future marketing philosophy and consumer engagement activities (including digital marketing and media), and the Company's ability to effectively manage its production and inventory levels in response to demand; use of estimates and assumptions in preparing the Company's financial statements, including with regard to revenue recognition, income taxes (including the expected timing and amount of the release of any tax valuation allowance), the assessment of goodwill, other intangible and long-lived assets for impairments, and the market value of inventory; the impact of any future impairments; managerial, transformational, operational, regulatory, legal and financial risks, including diversion of management attention to and management of cash flows, expenses and costs associated with the Company's transformation agenda, the Company's global business strategies, the management of its strategic partnerships, and the strategic review of the Company's consumer beauty business, and future strategic initiatives, and, in particular, the Company's ability to manage and execute many initiatives simultaneously including any resulting complexity, employee attrition or diversion of resources; the timing, costs and impacts of divestitures and the amount and use of proceeds from any such transactions; future divestitures and the impact thereof on, and future acquisitions, new licenses and joint ventures and the integration thereof with, our business, operations, systems, financial data and culture and the ability to realize synergies, manage supply chain challenges and other business disruptions, reduce costs (including through the Company's cash efficiency initiatives), avoid liabilities and realize potential efficiencies and benefits (including through the Company's restructuring initiatives or current or future fixed-cost savings plans) at the levels and at the costs and within the time frames contemplated or at all; increased competition, consolidation among retailers, shifts in consumers' preferred distribution and marketing channels (including to digital and prestige channels), distribution and shelf-space resets or reductions, compression of go-to-market cycles, changes in product and marketing requirements by retailers, reductions in retailer inventory levels and order lead-times or changes in purchasing patterns, impact from public health events on retail revenues, and other changes in the retail, e-commerce and wholesale environment in which the Company does business and sells its products and the Company's ability to respond to such changes (including its ability to expand its digital, direct-to-consumer and e-commerce capabilities within contemplated timeframes or at all); the Company and its joint ventures', business partners' and licensors' abilities to obtain, maintain and protect the intellectual property used in its and their respective businesses, protect its and their respective reputations (including those of its and their executives or influencers), and public goodwill, and defend claims by third parties for infringement of intellectual property rights; any change to the Company's capital allocation and/or cash management priorities, including any change in the Company's dividend policy and any change in the Company's stock repurchase plans; any unanticipated problems, liabilities or integration or other challenges associated with a past or future acquired business, joint ventures or strategic partnerships which could result in increased risk or new, unanticipated or unknown liabilities, including with respect to environmental, competition and other regulatory, compliance or legal matters, and specifically in connection with its strategic partnerships, risks related to the entry into a new distribution channel, the potential for channel conflict, risks of retaining customers and key employees, difficulties of integration (or the risks associated with limiting integration) and management of the partnerships, the Company's relationships with its strategic partners, the Company's ability to protect trademarks and brand names, litigation, investigations by governmental authorities, and changes in law, regulations and policies that affect the business or products of its strategic partnerships, including the risk that direct selling laws and regulations may be modified, interpreted or enforced in a manner that results in a negative impact to the business model, revenue, sales force or business of any of its strategic partnerships; the Company's international operations and joint ventures, including enforceability and effectiveness of its joint venture agreements and reputational, compliance, regulatory, economic and foreign political risks, including difficulties and costs associated with maintaining compliance with a broad variety of complex local and international regulations; the Company's dependence on certain licenses (especially in the fragrance category) and the Company’s ability to renew expiring licenses on favorable terms or at all; the Company's dependence on entities performing outsourced functions, including outsourcing of distribution functions, and third-party manufacturers, logistics and supply chain suppliers, and other suppliers, including third-party software providers, web-hosting and e-commerce providers; administrative, product development and other difficulties in meeting the expected timing of market expansions, product launches and re-launches and marketing efforts, including in connection with new products in the Company's skincare and prestige cosmetics portfolios; changes in the demand for the Company's products due to declining or depressed global or regional economic conditions, and declines in consumer confidence or spending, whether related to the economy (such as austerity measures, tax increases, high fuel costs, or higher unemployment), wars and other hostilities and armed conflicts, natural or other disasters, weather, pandemics, security concerns, terrorist attacks or other factors; global political and/or economic uncertainties, disruptions or major regulatory or policy changes, and/or the enforcement thereof that affect the Company's business, financial performance, operations or products, including the impact of the war in Ukraine and any escalation or expansion thereof, war in the Middle East and any escalation or expansion thereof, the current administration in the U.S. and related changes to regulatory and trade policies, changes in the U.S. tax code and/or regulations in other jurisdictions where we operate (including recent and pending implementation of the global minimum corporate tax (part of the "Pillar Two Model Rules") that may impact our tax liability in the European Union, and recent changes and future changes in tariffs, retaliatory or trade protection measures, trade policies and other international trade regulations in the U.S., the European Union and Asia and in other regions where the Company operates (and the Company's ability to manage the impact of such changes), potential regulatory limits on payment terms in the European Union, recent and future changes in sanctions regulations, and recent and future changes in regulations impacting the beauty industry, including regulatory measures addressing products, formulations, raw materials and packaging, and recent and future regulatory measures restricting or otherwise impacting the use of web sites, mobile applications or social media platforms that the Company uses in connection with its digital marketing and e-commerce activities; currency exchange rate volatility and currency devaluation and/or inflation, including the impact of elevated oil prices; the impact of ongoing wars and geopolitical uncertainty on capital markets and the related impact on the Company's ability to refinance outstanding debt at favorable rates; the Company's ability to implement and maintain pricing actions to effectively mitigate increased costs and inflationary pressures, and the reaction of customers or consumers to such pricing actions; the number, type, outcomes (by judgment, order or settlement) and costs of current or future legal, compliance, tax, regulatory or administrative proceedings, investigations and/or litigation, including product liability cases (including asbestos and talc-related litigation for which indemnities and/or insurance may not be available), distributor or licensor litigation, and compliance, litigation or investigations relating to our joint ventures and strategic partnerships; the Company's ability to manage seasonal factors and other variability and to anticipate future business trends and needs; disruptions in the availability and distribution of raw materials and components needed to manufacture the Company's products, and its ability to effectively manage its production and inventory levels in response to supply challenges; disruptions in operations, sales and in other areas, including due to disruptions in our supply chain, restructurings and other business alignment activities, manufacturing or information technology systems, labor disputes, extreme weather and natural disasters, impact from public health events, the outbreak of war or hostilities (including the war in Ukraine and the war in the Middle East, and any escalation or expansion thereof), the impact of global supply chain challenges or other disruptions in the international flow of goods (including disruptions arising from the closure of strategic airspaces or critical maritime routes or from changing tariff scenarios), and the impact of such disruptions on the Company's ability to generate profits, stabilize or grow revenues or cash flows, comply with its contractual obligations and accurately forecast demand and supply needs and/or future results; the Company's ability to adapt its business to address climate change concerns, including through the implementation of new or unproven technologies or processes, and to respond to increasing governmental and regulatory measures relating to environmental, social and governance matters, including expanding mandatory and voluntary reporting, diligence and disclosure, as well as new taxes (including on energy and plastic), new diligence requirements and the impact of such measures or processes on the Company's costs, business operations and strategy; restrictions imposed on the Company through its license agreements, credit facilities and senior unsecured bonds or other material contracts, its ability to generate cash flow to repay, refinance or recapitalize debt and otherwise comply with its debt instruments, and changes in the manner in which the Company finances its debt and future capital needs; increasing dependency on information technology, including as a result of expanded use of AI and advanced analytics in the Company's operations as well as remote working practices, and the Company's ability, or the ability of any of the third-party service providers used by the Company to support its business, to protect against service interruptions, data corruption, cyber-based attacks or network security breaches, including ransomware attacks, costs and timing of implementation and effectiveness of any upgrades or other changes to information technology systems, and the cost of compliance or the Company's failure to comply with any privacy or data security laws (including the European Union General Data Protection Regulation, the California Consumer Privacy Act and similar state laws, the Brazil General Data Protection Law and the China Data Security Law and Personal Information Protection Law) or to protect against theft of customer, employee and corporate sensitive information; the Company's ability to attract and retain key personnel and the impact of senior management transitions; the distribution and sale by third parties of counterfeit and/or gray market versions of the Company's products; the impact of the Company's ongoing strategic transformation agenda and continued process improvements on the Company's relationships with key customers and suppliers and certain material contracts; the Company's relationship with JAB Beauty B.V., as the Company's majority stockholder, and its affiliates, and any related conflicts of interest or litigation; the Company's relationship with KKR, whose affiliates are investors in the Wella Company following the sale of the Company's remaining stake in Wella, and any related conflicts of interest or litigation, and the timing and terms of any future sale or initial public offering impacting the Company's Wella Distribution Rights; future sales of a significant number of shares by the Company's majority stockholder or the perception that such sales could occur; and other factors described elsewhere in this document and in documents that the Company files with the SEC from time to time. When used herein, the term "includes" and "including" means, unless the context otherwise indicates, "including without limitation". More information about potential risks and uncertainties that could affect the Company's business and financial results is included under the heading "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2025 and annual report on Form 10-K for the year ended June 30, 2026 and other periodic reports the Company has filed and may file with the SEC from time to time. All forward-looking statements made in this release are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this release, and the Company does not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance unless expressed as such, and should only be viewed as historical data. Non-GAAP Financial Measures To supplement the financial measures prepared in accordance with GAAP, we use non-GAAP financial measures for Coty Inc. including Adjusted operating income (loss), Adjusted EBITDA, Adjusted net income (loss), and Adjusted net income (loss) attributable to Coty Inc. to common stockholders (collectively, the "Adjusted Performance Measures"). The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in tables below. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for or superior to, financial measures reported in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies, including companies in the beauty industry, may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes. Despite the limitations of these non-GAAP financial measures, our management uses the Adjusted Performance Measures as key metrics in the evaluation of our performance and annual budgets and to benchmark performance of our business against our competitors. The following are examples of how these Adjusted Performance Measures are utilized by our management: strategic plans and annual budgets are prepared using the Adjusted Performance Measures; senior management receives a monthly analysis comparing budget to actual operating results that is prepared using the Adjusted Performance Measures; and senior management's annual compensation is calculated, in part, by using some of the Adjusted Performance Measures. In addition, our financial covenant compliance calculations under our debt agreements are substantially derived from these Adjusted Performance Measures. Our management believes that Adjusted Performance Measures are useful to investors in their assessment of our operating performance and the valuation of the Company. In addition, these non-GAAP financial measures address questions we routinely receive from analysts and investors and, in order to ensure that all investors have access to the same data, our management has determined that it is appropriate to make this data available to all investors. The Adjusted Performance Measures exclude the impact of certain items (as further described below) and provide supplemental information regarding our operating performance. By disclosing these non-GAAP financial measures, our management intends to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We provide disclosure of the effects of these non-GAAP financial measures by presenting the corresponding measure prepared in conformity with GAAP in our financial statements, and by providing a reconciliation to the corresponding GAAP measure so that investors may understand the adjustments made in arriving at the non-GAAP financial measures and use the information to perform their own analyses. Adjusted operating income/Adjusted EBITDA excludes restructuring costs and business structure realignment programs, amortization, acquisition- and divestiture-related costs and acquisition accounting impacts, stock-based compensation, and asset impairment charges and other adjustments as described below. For adjusted EBITDA, in addition to the preceding, we exclude adjusted depreciation as defined below. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. They are primarily incurred to realign our operating structure and integrate new acquisitions, and implement divestitures of components of our business, and fluctuate based on specific facts and circumstances. Additionally, Adjusted net income attributable to Coty Inc. and Adjusted net income attributable to Coty Inc. per common share are adjusted for certain interest and other (income) expense items, as described below, and the related tax effects of each of the items used to derive Adjusted net income as such charges are not used by our management in assessing our operating performance period-to-period. Adjusted Performance Measures reflect adjustments based on the following items: Costs related to acquisition and divestiture activities: The Company has excluded acquisition- and divestiture-related costs and the accounting impacts such as those related to transaction costs and costs associated with the revaluation of acquired inventory in connection with business combinations because these costs are unique to each transaction. Additionally, for divestitures, the Company excludes write-offs of assets that are no longer recoverable and contract related costs due to the divestiture. The nature and amount of such costs vary significantly based on the size and timing of the acquisitions and divestitures, and the maturities of the businesses being acquired or divested. Also, the size, complexity and/or volume of past transactions, which often drives the magnitude of such expenses, may not be indicative of the size, complexity and/or volume of any future acquisitions or divestitures. Restructuring and other business realignment costs: The Company has excluded costs associated with restructuring and business structure realignment programs to allow for comparable financial results to historical operations and forward-looking guidance. In addition, the nature and amount of such charges vary significantly based on the size and timing of the programs. By excluding the referenced expenses from the non-GAAP financial measures, management is able to further evaluate the Company's ability to utilize existing assets and estimate their long-term value. Furthermore, our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance. Asset impairment charges: The Company has excluded the impact of asset impairments as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance. Amortization expense: The Company has excluded the impact of amortization of finite-lived intangible assets, as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance. Although we exclude amortization of intangible assets from our non-GAAP expenses, our management believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets. Gain or loss on sale and early license termination: The Company has excluded the impact of gain or loss on sale and early license termination as such amounts are inconsistent in amount and frequency and are significantly impacted by the size of the sale and early license termination. Costs related to market exit: The Company has excluded the impact of direct incremental costs related to our decision to wind down our business operations in Russia. We believe that these direct and incremental costs are inconsistent and infrequent in nature. Consequently, our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance. Gains on sale of real estate: The Company has excluded the impact of gains on sale of real estate as such amounts are inconsistent in amount and frequency and are significantly impacted by the size of the sale. Our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance. Stock-based compensation: Although stock-based compensation is a key incentive offered to our employees, we have excluded the effect of these expenses from the calculation of adjusted operating income and adjusted EBITDA. This is due to their primarily non-cash nature; in addition, the amount and timing of these expenses may be highly variable and unpredictable, which may negatively affect comparability between periods. Depreciation and Adjusted depreciation: Our adjusted operating income excludes the impact of accelerated depreciation for certain restructuring projects that affect the expected useful lives of Property, Plant and Equipment, as such charges vary significantly based on the size and timing of the programs. Further, we have excluded adjusted depreciation, which represents depreciation expense net of accelerated depreciation charges, from our adjusted EBITDA. Our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance. Other (income) expense: The Company has excluded the impact of pension curtailment (gains) and losses and pension settlements as such events are triggered by our restructuring and other business realignment activities and the amount of such charges vary significantly based on the size and timing of the programs. Further, we have excluded the change in fair value of the investment in Wella and the Wella Distribution Rights, as well as expenses related to potential or actual sales transactions reducing equity investments, as our management believes these unrealized (gains) and losses do not reflect our underlying ongoing business, and the adjustment of such impact helps investors and others compare and analyze performance from period to period. Such transactions do not reflect our operating results and we have excluded the impact as our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance. Noncontrolling interest: This adjustment represents the after-tax impact of the non-GAAP adjustments included in Net income attributable to noncontrolling interests based on the relevant noncontrolling interest percentage. Tax: This adjustment represents the impact of the tax effect of the pretax items excluded from Adjusted net income. The tax impact of the non-GAAP adjustments is based on the tax rates related to the jurisdiction in which the adjusted items are received or incurred. Additionally, adjustments are made for the tax impact of any intra-entity transfer of assets and liabilities. Also, in connection with our market exit in Russia, we have adjusted for the release of tax charges previously taken related to certain direct incremental impacts of the decision. The Company has provided a quantitative reconciliation of the difference between the non-GAAP financial measures and the financial measures calculated and reported in accordance with GAAP. For a reconciliation of adjusted gross profit to gross profit, adjusted EPS (diluted) to EPS (diluted), and adjusted net revenues to net revenues, see the table entitled "Reconciliation of Reported to Adjusted Results for the Consolidated Statements of Operations." For a reconciliation of adjusted operating income to operating income and adjusted operating income margin to operating income margin, see the tables entitled "Reconciliation of Reported Operating Income (Loss) to Adjusted Operating Income" and "Reconciliation of Reported Operating Income (Loss) to Adjusted Operating Income by Segment." For a reconciliation of adjusted effective tax rate to effective tax rate, see the table entitled "Reconciliation of Reported Income (Loss) Before Income Taxes and Effective Tax Rates to Adjusted Income Before Income Taxes and Adjusted Effective Tax Rates." For a reconciliation of adjusted net income and adjusted net income margin to net income (loss), see the table entitled "Reconciliation of Reported Net Income (Loss) to Adjusted Net Income." The Company also presents free cash flow, adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"), immediate liquidity, Financial Net Debt and Economic Net Debt. Management believes that these measures are useful for investors because it provides them with an important perspective on the cash available for debt repayment and other strategic measures and provides them with the same measures that management uses as the basis for making resource allocation decisions. Free cash flow is defined as net cash provided by operating activities less capital expenditures; adjusted EBITDA is defined as adjusted operating income, excluding adjusted depreciation and non-cash stock-based compensation. Net debt or Financial Net Debt (which the Company referred to as "net debt" in prior reporting periods) is defined as total debt less cash and cash equivalents. For a reconciliation of Free Cash Flow, see the table entitled "Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow," for adjusted EBITDA, see the table entitled "Reconciliation of Adjusted Operating Income to Adjusted EBITDA" and for Financial Net Debt, see the tables entitled "Reconciliation of Total Debt to Financial Net Debt." Further, our immediate liquidity is defined as the sum of available cash and cash equivalents and available borrowings under our Revolving Credit Facility (please see table "Immediate Liquidity"). We operate on a global basis, with the majority of our net revenues generated outside of the U.S. Accordingly, fluctuations in foreign currency exchange rates can affect our results of operations. Therefore, to supplement financial results presented in accordance with GAAP, certain financial information is presented in "constant currency", excluding the impact of foreign currency exchange translations to provide a framework for assessing how our underlying businesses performed excluding the impact of foreign currency exchange translations. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We calculate constant currency information by translating current and prior-period results for entities reporting in currencies other than U.S. dollars into U.S. dollars using prior year foreign currency exchange rates. The constant currency calculations do not adjust for the impact of revaluing specific transactions denominated in a currency that is different to the functional currency of that entity when exchange rates fluctuate, or for the impacts of hyperinflation. The constant currency information we present may not be comparable to similarly titled measures reported by other companies. These non-GAAP measures should not be considered in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP. To the extent that the Company provides guidance, it does so only on a non-GAAP basis and does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for restructuring, integration and acquisition-related expenses, amortization expenses, non-cash stock-based compensation, adjustments to inventory, and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant. - Tables Follow - The adjusted effective tax rate was 192.5% for the three months ended June 30, 2026 compared to (65.8%) for the three months ended June 30, 2025. The differences were primarily due to an increase in valuation allowances recorded in the prior year on interest expense carryforwards. The adjusted effective tax rate was 30.3% for the fiscal year ended June 30, 2026 compared to 35.1% in the fiscal year ended June 30, 2025. The differences were primarily due to an increase in valuation allowances recorded in the prior year on interest expense carryforwards. View source version on businesswire.com: https://www.businesswire.com/news/home/20260819037136/en/ Contacts For more information: Investor Relations Olga Levinzon, +1 212 [email protected] Media Antonia Werther, +31 621 [email protected]