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Coty Reports In Line Q1 Results, with Q2 Sales Tracking Toward the More Favorable End of Prior Guidance; Expects a Return to Growth in 2H FY26

COTYPARIS:COTY
  • Coty Inc. reported first-quarter fiscal 2026 net revenues of $1,577.2 million, a 6% decline on a reported basis and 8% on a like-for-like basis compared to the prior year.
  • Prestige segment net revenue decreased 4% on a reported basis to $1,069.5 million, while Consumer Beauty net revenue fell 9% to $507.7 million.
  • Reported operating income was $185.0 million, down 22% year-over-year, while adjusted operating income declined 21% to $240.5 million.
  • The company achieved a 17% growth in ultra-premium fragrances & scenting adjacencies, with the BOSS Bottled Beyond launch performing as a top male fragrance in Europe & Germany.
  • Coty announced plans to integrate Prestige Beauty & Mass Fragrance businesses to leverage its core strengths as a global fragrance powerhouse.
  • A strategic review was initiated for the mass color cosmetics business generating $1.2 billion in sales & the Brazil business contributing $400 million in sales.
  • Gordon von Bretten was appointed President of Consumer Beauty to drive innovation, brand equity, & operational improvements.
  • The company issued $900 million in senior notes due 2031 to redeem outstanding 2026 senior secured notes as part of its deleveraging strategy.
  • Coty's financial net debt increased slightly to $3,804.7 million at quarter-end, resulting in a financial leverage ratio of 3.7x.
  • Adjusted EBITDA decreased 18% to $296.1 million, with an adjusted EBITDA margin of 18.8%.
  • Free cash flow for the quarter totaled $11.2 million, an improvement from a $7.9 million outflow in the prior year period.
  • Coty expects Q2 sales to track toward the more favorable end of prior guidance, with a return to sales & profit growth anticipated in the second half of fiscal 2026.
  • The company plans to launch major innovations in the second half of 2026, including a new flagship brand fragrance & makeup under Marc Jacobs Beauty.
  • Sustainability progress includes a 16% reduction in water withdrawal since setting a 2030 target & the publication of its first CSRD-compliant sustainability report.
  • Coty continues to actively pursue the monetization of its 25.8% stake in Wella to further reduce debt levels.