Coty Inc. — Fourth Quarter Fiscal Year 2026 Earnings Summary

Financial Performance

• Q4 FY26 net revenues were $1,269.2 million, a 1% increase year-over-year on a reported basis, including a 3% benefit from foreign exchange; on a like-for-like (LFL) basis, revenues declined 1%, impacted by an estimated 1% headwind from the Middle East conflict.
• Full-year FY26 net revenues were $5,806.6 million, a 2% decrease year-over-year on a reported basis (including a 4% FX benefit); on an LFL basis, revenues decreased 5%.
• Reported operating loss for Q4 FY26 was $42.7 million compared to reported operating income of $15.5 million in the prior year; reported operating loss margin was 3.4%.
• Reported operating loss for FY26 was $81.5 million compared to reported operating income of $241.1 million in the prior year; reported operating loss margin was 1.4%.
• Adjusted operating income for Q4 FY26 was $39.5 million, a 42% decrease year-over-year; adjusted operating margin was 3.1%.
• Adjusted operating income for FY26 was $626.7 million, a 27% decrease year-over-year; adjusted operating margin was 10.8%.
• Reported net loss attributable to common shareholders for Q4 FY26 was $144.3 million; reported net loss attributable to common shareholders for FY26 was $618.0 million.
• Adjusted net loss attributable to common shareholders for Q4 FY26 was $13.4 million, an improvement from $44.9 million in the prior year; adjusted net income attributable to common shareholders for FY26 was $185.1 million, a 2% decrease from the prior year.
• Adjusted EBITDA for Q4 FY26 was $93.6 million, a 26% decrease year-over-year; adjusted EBITDA margin was 7.4%.
• Adjusted EBITDA for FY26 was $846.9 million, a 22% decrease year-over-year; adjusted EBITDA margin was 14.6%.
• Cash flow from operating activities for Q4 FY26 was $116.0 million; for FY26, it was $537.8 million.
• Free cash flow for Q4 FY26 was $72.6 million; for FY26, it was $348.2 million.
• Total debt as of June 30, 2026, was $3,088.2 million, down from $3,216.2 million as of March 31, 2026.
• Financial net debt as of June 30, 2026, was $2,912.1 million, resulting in a financial leverage ratio (net debt to adjusted EBITDA) of 3.4x.

Guidance and Future Outlook

• Coty expects Q1 FY27 LFL revenue to decline by a low- to mid-single-digit percentage.
• Coty anticipates Q1 FY27 adjusted gross margin to decline by approximately 50 to 100 basis points year-over-year.
• Coty expects Q1 FY27 adjusted EBITDA to decline by a low-teens percentage, representing a sequential improvement from the second half of FY26.
• Coty expects Q1 FY27 adjusted EPS, excluding the equity swap, to be between $0.11 and $0.13 per share.
• Coty expects free cash flow for the first half of FY27 to be over $300 million.
• FY27 is characterized as a transition year as the company completes its strategic review and advances the implementation of the Coty.Curated framework.
• The company expects performance to strengthen progressively throughout FY27, with year-over-year EBITDA trends expected to improve over the course of the year.
• Broader outlook for growth and profitability trajectory will be provided following the completion of the strategic review by the end of calendar year 2026.

Business Segments and Product Lines

• Prestige Segment: Q4 FY26 net revenues were $771.8 million (1% reported growth, 0.5% LFL decline); FY26 net revenues were $3,805.8 million (flat reported, 4% LFL decline). Adjusted operating income for Q4 was $60.2 million; for FY26, it was $669.9 million.
• Consumer Beauty Segment: Q4 FY26 net revenues were $497.4 million (1% reported growth, 3% LFL decline); FY26 net revenues were $2,000.8 million (3% reported decline, 7% LFL decline). Adjusted operating loss for Q4 was $20.7 million; for FY26, it was $43.2 million.
• Prestige Plans: Launch of BOSS Bottled Beyond for Her in FY27; expansion of Marc Jacobs Beauty makeup into Sephora stores and Travel Retail in September; launch of Kylie Cosmetics Mood Stones fragrance collection; debut of Etro fragrances in the second half of FY27 and Swarovski fragrances in CY27.
• Consumer Beauty Plans: Advancing "Color the Future" with fewer, higher-impact launches including CoverGirl TruBlend Sun & Sculpt Bronzing Glow Serum and Sally Hansen Miracle Gel; scaling adidas fragrances globally under "Future of Scenting."
• New Product Performance: Major FY26 launches including BOSS Bottled Beyond, Cosmic by Kylie Jenner Intense, and Calvin Klein Euphoria Elixirs performed well.
• Online Launches: Marc Jacobs Beauty makeup online launch at Sephora exceeded targets.
• Sell-out Trends: Sally Hansen is outperforming the U.S. category in units; CoverGirl has narrowed the gap versus the category significantly in both value and units in the U.S.

Market and Competitive Landscape

• Consumer demand for beauty remains resilient with continued growth in fragrances and cosmetics, though consumers are becoming increasingly selective.
• Sell-out performance in both divisions remains below market levels, a priority to close.
• Americas reported net revenues increased 9% in Q4 FY26 (6% LFL), driven by higher sales in the U.S., Brazil, and Travel Retail.
• EMEA reported net revenues decreased 8% in Q4 FY26 (10% LFL), driven by lower sales in the Middle East, Germany, and Central and Eastern Europe.
• Asia Pacific reported net revenues increased 11% in Q4 FY26 (7% LFL), driven by higher sales in China, Southeast Asia, Australia, New Zealand, and Travel Retail.
• The company is incorporating concrete market share targets into its global incentive program.

Risks and Challenges

• The Middle East conflict created an estimated 1% headwind to sales in Q4 FY26.
• The exit from the Gucci Beauty license will result in a step-down in sales and profit in FY28.
• Gross margin pressure was driven by lower cost absorption due to reduced volumes, elevated excess and obsolescence charges, and the impact from tariffs.
• Reported operating loss deterioration was driven by top-line pressure, gross margin pressure, and higher fixed costs compared to the prior year.
• The company faces risks related to geopolitical uncertainties, inflationary pressures, currency exchange rate volatility, and supply chain disruptions.
• The company is subject to risks regarding the successful implementation of its strategic priorities and the ability to compete effectively in the beauty industry.

Management Commentary and Tone

• Markus Strobel, Executive Chairman and Interim CEO, stated the company closed FY26 on a stronger note with sales and profit ahead of targets and growing free cash flow despite headwinds.
• Management expressed satisfaction with returning to reported sales growth and the sequential improvement in LFL trends.
• Management acknowledged that sell-out performance remains below market levels and is a clear priority.
• The tone indicates confidence that the Coty.Curated framework will unlock significant potential and translate into shareholder value, though recovery is not expected to be linear.
• Management emphasized the transition nature of FY27 as they strengthen the core business and simplify the portfolio.

Analyst Questions and Answers

• No specific analyst questions and answers are detailed in the provided press release text.

Other Key Points

• In December 2025, Coty monetized its remaining stake in Wella for $750 million.
• In July 2026, Coty announced an agreement to sell the Gucci Beauty license back to Kering approximately one year ahead of expiration for $400 million, plus additional proceeds from inventory.
• Under the Gucci agreement, Coty received $250 million at signing and will receive an additional $150 million by September 30, 2027 (up to $30 million contingent on criteria).
• Coty is rightsizing its commercial organization, Consumer Beauty R&D, and global brand marketing functions to enhance agility.
• The company is executing a significant fixed cost reduction program to mitigate the FY28 impact of the Gucci exit.
• The company is advancing a strategic review of its Consumer Beauty business, with final portfolio decisions expected by the end of calendar year 2026.
• Proceeds from divestitures are being deployed toward debt reduction, reinvestment in core prestige fragrance and beauty brands, and organizational optimization.