10-Q · May 5, 2026
Coty Inc. reported Q3 FY2026 results showing a slight revenue decline to $1.2816B, missing estimates and down 1% year-over-year. The company experienced significant operating losses, particularly in the Consumer Beauty…
Earnings analysis · 10-K
COTY earnings analysis
Filed August 20, 2026 · Our reading of the company's report
The latest report
Coty’s fiscal 2026 results show continued revenue deterioration and a sharp profitability reset, with revenue down 2%, reported operating margin at (1.4%), and adjusted EBITDA down 22% to $846.9 million. Prestige…
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Coty’s fiscal 2026 results show continued revenue deterioration and a sharp profitability reset, with revenue down 2%, reported operating margin at (1.4%), and adjusted EBITDA down 22% to $846.9 million. Prestige remains the core profit engine, but Consumer Beauty posted a $442.6 million operating loss and absorbed $362.8 million of asset impairment charges. Deleveraging improved through the Wella divestiture and debt repayments, but the early Gucci exit, tariff costs, weak Consumer Beauty performance and a cautious fiscal 2027 transition outlook leave the trajectory bearish.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.7
What stood out
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Focused fragrance-led portfolio strategy
Coty is narrowing its strategy around its global fragrance capabilities, structurally profitable beauty categories, e-commerce and Travel Retail. The Coty.Curated framework emphasizes fewer, bigger and better initiatives, while the company is targeting a return to market-share growth and greater use of AI-powered data operations.
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Revenue decline continued
Fiscal 2026 net revenue declined 2% to $5,806.6 million, following a 4% decline in fiscal 2025. Unit volume fell 5% in fiscal 2026, partly offset by a 4% positive foreign-exchange translation impact.
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Prestige carries profitability
Prestige remained the earnings anchor: its $3,805.8 million revenue represented approximately 66% of consolidated sales, and its $444.5 million operating income more than offset Consumer Beauty’s $442.6 million operating loss. Prestige cosmetics revenue increased $18.1 million, primarily from Burberry makeup growth in Asia.
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Margins and EBITDA contracted
Profitability deteriorated materially: gross margin fell approximately 190 basis points to 62.9%, reported operating margin declined from 4.1% to (1.4%), adjusted operating margin fell from 14.5% to 10.8%, and adjusted EBITDA declined from $1,081.7 million to $846.9 million.
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Deleveraging advanced
Cash generation improved operationally, with operating cash flow rising to $537.8 million from $492.6 million, while capital expenditures declined to $189.6 million from $215.0 million. The company also reduced total debt to $3,088.2 million from $4,008.4 million, helped by the $750.0 million Wella sale proceeds and debt redemptions.
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Portfolio monetization supports deleveraging
Coty completed the sale of its remaining 25.8% Wella interest for $750.0 million in cash and retained Wella Distribution Rights initially valued at $58.0 million. Subsequent to year-end, it received $250.0 million from the Gucci license termination and expects aggregate Gucci consideration of approximately $400.0 million.
What to watch
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Gucci exit creates transition risk
The Gucci Beauty license was terminated approximately one year early, with Coty operating the brand through at least June 30, 2027; the company expects the exit to reduce revenue and net income in fiscal 2028. The company expects to begin a savings plan in the second half of fiscal 2027 to address stranded central and divisional costs.
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Tariffs pressure costs and margins
Tariff exposure became quantifiable: Coty incurred $29.3 million of tariff-related costs after mitigation in fiscal 2026 and expects another $3.4 million in the first quarter of fiscal 2027. The filing identifies prestige fragrances shipped from Barcelona to the U.S. and components and marketing materials sourced from China as the largest exposure areas.
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Consumer Beauty impairment risk
Consumer Beauty deteriorated sharply and triggered significant impairment risk. Fiscal 2026 included $237.1 million of goodwill impairment and $125.7 million of trademark impairments in the segment; management states that a 25-basis-point decline in annual revenue or a 25-basis-point increase in the discount rate could cause an additional $35.0 million or $43.0 million impairment, respectively.
Management's outlook
The 10-K provides Q1 fiscal 2027 outlook but no comparable prior outlook or full-year numeric guidance. Q1 reported revenue is expected to decline low- to mid-single digits with neutral foreign exchange, and gross margin is expected to be pressured by lower sales and unfavorable cost absorption. Fiscal 2027 is described as a transition year; Gucci-related revenue and net income are expected to decline in fiscal 2028.
Earlier filings 4
10-Q · February 5, 2026
Revenue was essentially flat year-over-year at $1,678.6 million (vs $1,669.9 million a year ago), but gross profit declined to $1,070.6 million and operating income fell to $148.2 million, driving a GAAP loss per…
10-Q · November 5, 2025
Coty reported net revenues of $1,577.2 million for the three months ended September 30, 2025, down from $1,671.5 million a year ago. Gross profit fell to $1,016.8 million and diluted EPS declined to $0.07 from $0.09;…
10-K · August 21, 2025
Coty positions itself as a fragrance-led beauty company executing a multi-year Transformation Plan focused on leveraging its leadership in global fragrances, expanding into select profitable categories and channels…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.