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Coty Announces Second Quarter Fiscal Year 2026 Results

COTYPARIS:COTY
  • Coty Inc. reported Q2 fiscal 2026 net revenues of $1,678.6 million, a 1% increase on a reported basis and a 3% decrease on a like-for-like basis compared to the prior year.
  • The company delivered adjusted net income of $119.7 million for the quarter, with adjusted EPS of $0.14, while reported net loss was $126.9 million.
  • Net debt was reduced to $2,601.4 million, marking a nine-year low for leverage ratios.
  • Markus Strobel began his tenure as Executive Chairman and Interim CEO on January 1, 2026, introducing the "Coty. Curated." strategic framework.
  • Coty sold its remaining 25.8% stake in Wella to KKR for $750 million in upfront cash, which was primarily used to pay down long-term debt.
  • Prestige segment revenue grew 2% on a reported basis but declined 2% on a like-for-like basis, driven by strong growth in EMEA offset by declines in the Americas.
  • Consumer Beauty segment revenue decreased 2% on a reported basis and 6% on a like-for-like basis, reflecting broad-based category declines.
  • Adjusted EBITDA for the quarter was $330.2 million, a 15% decrease year-over-year, with an adjusted margin of 19.7%.
  • Coty withdrew its full-year fiscal 2026 guidance for EBITDA and free cash flow due to the leadership transition and complex market conditions.
  • The company now provides Q3 fiscal 2026 guidance, expecting like-for-like revenue to decline in the mid-single-digit range.
  • Q3 adjusted EBITDA is projected to be between $100 million and $110 million, translating to approximately breakeven adjusted EPS excluding equity swap impacts.
  • Free cash flow for Q3 is expected to be negative due to seasonality, working capital phasing, and approximately $30 million in cash taxes related to the Wella sale.
  • Coty received an A rating from CDP Climate, placing it on the CDP Climate A List.
  • Key product launches planned include the Calvin Klein female fragrance initiative, Marc Jacobs Beauty makeup in calendar year 2026, and a Swarovski fragrance in calendar year 2027.
  • Reported gross margin decreased to 63.8% from 66.7% in the prior year, impacted by promotional activity, geographical mix, and tariffs.
  • The Americas region saw a 2% reported revenue decline, while EMEA grew 3% reported and Asia Pacific declined 1% reported for the quarter.