Coty Announces Third Quarter Fiscal Year 2026 Results

Q3 Results Inline to Ahead of Expectations

Growth in Fiscal Year to Date Operating Cash Flow to $422M and Free Cash Flow to $276M, Despite Lower Profit, Reflecting Disciplined Working Capital and Capital Expenditure

Initial Implementation of Coty.Curated Strategic Framework to Support Healthier Business In FY27 & Beyond

NEW YORK--(BUSINESS WIRE)--Regulatory News:

Coty Inc. (NYSE: COTY) (Paris: COTY) (“Coty” or “the Company”) today announced its results for the third quarter of fiscal year 2026, ended March 31, 2026. Despite Middle East-related disruptions, Coty delivered Q3 profit ahead of expectations, supported by cost control and the reallocation of investments behind activations in Q4.

“Q3 marked an important step toward restoring consistent performance commensurate with Coty's outstanding assets and capabilities,” said Markus Strobel, Executive Chairman and Interim Chief Executive Officer.

“While the Q3 results were below our potential on an absolute basis, we were pleased to deliver profitability ahead of our guidance despite the disruption in our Middle East business late in the quarter. This was a welcome first step, as we begin to gradually strengthen our operational control and execution.

“We are methodically implementing the Coty.Curated strategic framework announced last quarter, centered on sharper priorities, more focused investments, improved execution, and increased support behind our core businesses. We are embedding this framework into our FY27 action plans for both divisions, including significantly reducing the number of smaller launches, lowering marketing asset production costs in part through broad-based AI deployment for our owned brands, while increasing consumer engagement spending, and working to simplify our operational model, all with the ultimate objective to grow our sell out and market share over time.

“As we near the conclusion of our strategic planning and portfolio assessment, to be validated with our Board including our new independent directors, we expect to share more details in the coming quarters. At the same time, I remain confident in Coty's position as a leading fragrance player, underpinned by our multiple iconic brands, and targeted presence in other beauty categories, including cosmetics, skin care, and body care. We believe stronger, more focused execution across our portfolio will enable us to deliver consistent, profitable growth, advance our deleveraging agenda, and further strengthen our balance sheet.

“While this will take time, I strongly believe that with sustained focus and discipline, Coty is well positioned to realize its full potential.”

RESULTS AT A GLANCE

Three Months Ended March 31, 2026, Summary Results

For the three months ended March 31, 2026, compared to the three months ended March 31, 2025:

• Net revenue of $1,281.6 million decreased 1% on a reported basis and included a 6% benefit from foreign exchange (FX). On a like-for-like (LFL) basis, net revenue declined 7%, which included an estimated 1.4% headwind from the conflict in the Middle East.
• Prestige net revenue of $830.9 million, representing 65% of the Company's total sales, was flat on a reported basis and declined 5% on a LFL basis. This included an estimated 2% headwind from the conflict in the Middle East.
• Consumer Beauty net revenue of $450.7 million, representing 35% of the Company's total sales, decreased 4% on a reported basis and 10% on a LFL basis, which included an estimated 1% headwind from the conflict in the Middle East.
• Reported gross margin of 61.8% decreased 230 basis points year-over-year, driven by supply chain cost under absorption due to lower sales, particularly in Consumer Beauty, coupled with elevated excess & obsolescence in Consumer Beauty, and the impact from tariffs on freight costs. Adjusted gross margin of 61.8% decreased 250 basis points year-over-year.
• Reported operating loss of $372.0 million deteriorated from reported operating loss of $280.4 million in the prior year, and included a $362.8 million impairment charge reflecting a reduction in the fair value of the Company's Consumer Beauty business driven by lower forecasted revenues and a higher weighted average cost of capital, following a significant decline in the Company’s share price over the last three months. Reported loss margin of 29.0% compared to reported loss margin of 21.6% in the prior year. Adjusted operating income of $72.4 million declined from $147.9 million in the prior year, reflecting lower sales and gross profit. Adjusted operating margin of 5.6% contracted by 580 basis points year-over-year.
• Reported net loss of $411.4 million compared to reported net loss of $409.0 million in the prior year. Reported net loss margin of 32.1% compared to reported net loss margin of 31.5% in the prior year. Adjusted net loss of $27.2 million declined from adjusted net income of $6.8 million in the prior year. Adjusted net loss margin of 2.1% compared to an adjusted net income margin of 0.5% in the prior year. Reported and adjusted net loss included a $40.7 million negative impact from the mark-to-market on the equity swap, compared with a $60.1 million negative impact from the mark-to-market on the equity swap in the prior year quarter.
• Adjusted EBITDA of $127.0 million decreased 38% from $204.2 million primarily reflecting lower sales and gross profit. Adjusted EBITDA margin of 9.9% decreased by 580 basis points.
• Reported loss per share of $0.47 was in line with the prior year. Adjusted loss per share of $0.03 declined from adjusted earnings per share of $0.01 in the prior year. Reported and adjusted loss per share included a $0.05 negative impact from the mark-to-market on the equity swap, compared with an $0.07 negative impact from the mark-to-market on the equity swap in the prior year quarter.
• Cash flow used in operating activities was $203.1 million, compared with $122.5 million in the prior year period. Free cash outflow was $248.7 million, compared with $168.4 million in the prior year period.
• Total debt of $3,216.2 million on March 31, 2026 increased from $3,038.1 million on December 31, 2025. This resulted in a total debt to net income ratio of 6.2x. Financial net debt of $2,959.1 million increased from $2,601.4 million on December 31, 2025. This resulted a financial leverage ratio (net debt to adjusted EBITDA) of 3.4x.

Nine Months Ended March 31, 2026, Summary Results

For the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025:

• Net revenue of $4,537.4 million decreased 2% and included a 4% benefit from FX. On a LFL basis, net revenue decreased 6%.
• Prestige net revenue of $3,034.0 million, representing 67% of the Company's total sales, decreased 1% on a reported basis and 5% on a LFL basis.
• Consumer Beauty net revenue of $1,503.4 million, representing 33% of the Company's total sales, decreased 5% on a reported basis and 9% on a LFL basis.
• Reported gross margin of 63.5% decreased 200 basis points year-over-year, reflecting supply chain cost under absorption due to lower sales, particularly in Consumer Beauty, the impact from tariffs and a more promotional environment in the first half of the year. Adjusted gross margin of 63.6% decreased 200 basis points year-over-year.
• Reported operating loss of $38.8 million declined from reported operating income of $225.6 million in the prior year. Reported operating loss margin was 0.9%, down from reported operating margin of 4.9% in the prior year. Adjusted operating income of $587.2 million declined 25%, from $785.2 million in the prior year. Adjusted operating margin of 12.9%, reflected a 400 basis point decline.
• Reported net loss of $473.7 million compared to net loss of $309.0 million in the prior year. Reported net loss margin of 10.4% deteriorated from reported net loss margin of 6.7% in the prior year. Adjusted net income of $198.5 million decreased from $233.7 million in the prior year. Adjusted net income margin of 4.4% declined from 5.0% in the prior year. Reported and adjusted net income included a $105.8 million negative impact from the mark-to-market on the equity swap, compared with a $188.9 million negative impact from the mark-to-market on the equity swap in the prior year quarter.
• Adjusted EBITDA of $753.3 million decreased 21% year-over-year from $955.0 million primarily driven by lower sales and gross profit. Adjusted EBITDA margin of 16.6% reflected a 400 basis point decline.
• Reported loss per share of $0.54 compared to reported loss per share of $0.36 in the prior year. Adjusted earnings per share (EPS) of $0.23 compared to $0.27 in the prior year. Reported loss per share and adjusted EPS included a $0.12 negative impact from the mark-to-market on the equity swap, compared with an $0.21 negative impact from the mark-to-market on the equity swap in the prior year quarter.
• Cash flow from operating activities was $421.8 million, compared with $409.4 million in the prior year period. Free cash flow totaled $275.6 million, compared with $242.7 million in the prior year period.

Noteworthy Developments:

• Coty’s Prestige strategy continues to be anchored by key brands such as Burberry, Hugo Boss, Calvin Klein, Marc Jacobs, Chloé and Kylie Cosmetics. FY26 major launches continue to perform well fiscal year-to-date, including BOSS Bottled Beyond and Cosmic by Kylie Jenner Intense.
• Coty continues to see encouraging signs in Consumer Beauty, with both CoverGirl and Sally Hansen narrowing the gap to the category on a retail sales basis, while outperforming the category on a unit basis.
• Coty has begun implementing its Coty.Curated framework to support sharper focus and stronger execution across the portfolio.
• Coty continued to make progress on its “Color the Future” roadmap to improve Consumer Beauty cosmetics performance, supported by more consistent media investment behind key franchises, a more focused innovation pipeline, ongoing value chain optimization, and actions to stabilize gross margins over time.
• The Company’s Board of Directors appointed five new independent directors: Carsten Fischer, Alia Gogi, Robert Kunze-Concewitz, Maria Carla Liuni, and Stephanie Plaines.
• Coty repaid its remaining 2026 bond maturities on April 15, 2026.
• Coty was named the winner of Newsweek’s AI Impact Award for AI Workplace: Best Outcomes, Employee Engagement.
• Coty was upgraded from A to AA by MSCI ESG Ratings, placing the Company in MSCI’s Leader category and among the top‑rated beauty companies in the assessment, supported by governance changes and actions in responsible sourcing, product safety, and packaging. In April, Coty also maintained a Low Risk ESG rating from Sustainalytics and announced that its net‑zero target has been validated by the Science Based Targets initiative (SBTi).

Pipeline for FY26 and Beyond:

Prestige Plans

• Continuing the global amplification of the Fall 2025 BOSS Bottled Beyond launch, with the BOSS Bottled franchise gaining share fiscal year-to-date across core markets, alongside U.S. distribution expansion, and continued share gains for Hugo Boss in the U.S.
• New Burberry Her campaign, starring Olivia Dean, further strengthens the Burberry Her franchise, which has ranked in the Top 20 for the past three years
• Launching Calvin Klein Euphoria Elixirs in Spring 2026, a global female fragrance launch, with positive initial indicators in Europe and Travel Retail Americas
• Elevating Chloé Atelier des Fleurs through the launch of Les Essences Méditerranéennes, with strong momentum in China
• Makeup under Marc Jacobs Beauty debuting in June 2026
• Major launches planned for FY27 under several core brands, coupled with the all-new Swarovski fragrance targeted to launch in CY27

Consumer Beauty Plans

• CoverGirl and Sally Hansen have narrowed the retail sales gap to their respective categories in the U.S., while outperforming on a volume basis, fueled by stepped up support of iconic franchises coupled with outperformance in its Spring innovations
• Continuing to expand and amplify adidas fragrances globally, led by the adidas Vibes scenting collection, with adidas fragrance sales growing in Q3 and fiscal year-to-date

Outlook

Consumer demand for beauty remains resilient, with continued growth in fragrances and cosmetics. While the conflict in the Middle East continues to weigh on sales trends in the region, consumer demand in developed markets has remained broadly consistent with recent periods. Against this backdrop, Coty is steadily implementing its Coty.Curated strategic framework, focusing on core brands and markets, reducing portfolio complexity, and identifying savings opportunities across the P&L to support increased investment in consumer engagement and protect profitability.

Coty expects fourth quarter FY26 LFL revenue to decline by a mid‑single‑digit percentage, reflecting a moderate sequential improvement from third quarter sales trends. This outlook embeds a benefit from an easier prior‑year comparison base, largely offset by headwinds in the Middle East business, which is expected to impact fourth quarter sales by an estimated 2% to 3%. On a reported basis, Coty expects foreign exchange to have a neutral impact in the quarter.

Adjusted gross margins are expected to decline by approximately 100 to 200 basis points year-on-year, reflecting operating deleverage from lower shipments, tariff impact, and elevated, though sequentially lower, excess and obsolescence, partially offset by productivity initiatives and procurement actions.

Coty anticipates FY26 adjusted EBITDA of approximately $838 million to $848 million, with an adjusted EPS, excluding the equity swap, of $0.33 to $0.35. Coty's stronger-than-guided Q3 profit delivery, supported by tight cost control and a decision to reallocate some investment to Q4, is allowing the company to protect investments during key Q4 commercial periods, particularly Mother's Day and Father's Day. Based on this cadence, Coty estimates Q4 adjusted EBITDA of $85 million to $95 million and adjusted EPS, excluding the equity swap, of breakeven to a loss of $0.02 per share.

Finally, Coty expects free cash flow in the fourth quarter to be neutral to moderately positive, reflecting the seasonality of the business and disciplined working capital management.

Prestige

• Reported net revenues in the third quarter increased by $1.5 million year-over-year primarily driven by an increase in Prestige cosmetics sales, partially offset by a decline in fragrance sales.
• Reported operating income in the third quarter decreased primarily due to lower gross margins driven by lower fragrance shipments and higher tariffs, coupled with the mechanical impact on fixed costs from lapping the bonus accrual release in the prior year.

Consumer Beauty

• Reported net revenues in the third quarter decreased by $19.0 million year-over-year primarily driven by a decrease in mass fragrance and color cosmetics sales.
• Reported operating income in the third quarter decreased primarily driven by a $362.8 million impairment charge reflecting a reduction in the fair value of the Company's Consumer Beauty business driven by lower forecasted revenues and a higher weighted average cost of capital, following a significant decline in the Company’s share price over the last three months.

Americas

• Reported net revenues in the third quarter decreased by $19.3 million year-over-year primarily driven by lower sales in the U.S. and Canada, partially offset by higher sales in the Americas Travel Retail channel.

EMEA

• Reported net revenues in the third quarter decreased by $12.4 million year-over-year primarily driven by lower sales in the Middle East, France, and Central and Eastern Europe.

Asia Pacific

• Reported net revenues in the third quarter increased by $14.2 million year-over-year primarily driven higher sales in China, Korea, Japan, and the Asia Travel Retail channel.

Conference Call

Coty Inc. will issue pre-recorded remarks on May 5, 2026 at approximately 4:45 PM (ET) / 10:45 PM (CET) and will hold a live question and answer session on May 6, 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 number: COTY3Q26).

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), the Company’s future operations and strategy (including the expected implementation and related impact of its strategic priorities), ongoing and future cost efficiency, optimization and restructuring initiatives and programs, expectations of the impact of inflationary pressures and the timing, magnitude and impact of pricing actions to offset inflationary costs, strategic transactions (including their expected timing and impact), the 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, and any transactions related thereto, use of proceeds from any transaction and the timing and outcome of the strategic review, expectations and/or plans with respect to joint ventures, the timing and size of any future 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), investments, plans and expectations with respect to licenses and/or portfolio changes, product launches, relaunches or rebranding (including the expected timing or impact thereof), plans for growth in certain categories, markets, channels and other white spaces, synergies, savings, performance, cost, timing and integration of acquisitions, 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 the Company’s forward repurchase contracts and plans for settlement of such contracts, the timing and extent of any future impairments, and synergies, savings, impact, cost, timing and implementation of the Company’s ongoing strategic transformation agenda (including operational and organizational structure changes, operational execution and simplification initiatives, fixed cost reductions (including its recent fixed cost reduction plan), continued process improvements and supply chain changes), the impact, cost, timing and implementation of e-commerce and digital initiatives, the expected impact, cost, timing and implementation of sustainability initiatives (including progress, plans, goals and our ability to achieve sustainability targets), the expected impact of geopolitical risks including the ongoing war in Ukraine and/or the armed conflict in the Middle East on its business operations, sales outlook and strategy, expectations regarding the impact of tariffs (including magnitude, scope and timing) and plans to manage such impact, expectations regarding economic recovery in Asia, consumer purchasing trends and the related impact on the Company’s plans for growth in China, the expected impact of global supply chain challenges and/or inflationary pressures (including as a result of the war in Ukraine and/or the ongoing war in the Middle East, or due to a change in tariffs or trade policy impacting raw materials) and expectations regarding future service levels and inventory levels, expectations regarding the expanded use of artificial intelligence ("AI") and advanced analytics in our operations and the timing and impact thereof, and the priorities of senior management.

For more information:
Investor Relations
Olga Levinzon, +1 212 389-7733
olga_levinzon@cotyinc.com

Media
Antonia Werther, +31 621 394495
antonia_werther@cotyinc.com