Coty Stock Earnings Reports

Key points for investors:

- Revenue trends and drivers: Prestige fragrances remain the company's strongest growth engine (mid-single-digit growth reported, stronger in the U.S. and most of Europe; China still lagging but improving). Consumer Beauty is bifurcated: Color cosmetics is under pressure (mid-single-digit declines), while mass fragrances are growing strongly (high single- to double-digits in places).

- Q4 outlook and FY26 phasing: The expected sharp sales deceleration in Q4 is largely a deliberate "cleanup" of the Prestige baseline ahead of a large innovation pipeline for fiscal 2026, not primarily due to a broad market collapse. Management expects gradual improvement through FY26, with some H1 declines before recovery later; a major new Prestige launch will have Q1 impact.

- Margin and pricing actions: Coty is implementing mid-single-digit price increases in Prestige to help offset cost pressures. Management believes fragrance demand is relatively inelastic and that pricing can be implemented without materially hurting volumes.

- Tariff and sourcing impact: Management estimates the tariff/sourcing headwind at roughly the low-$100 million level (primarily fiscal 2026) driven by component/marketing materials and Prestige fragrance sourcing from Europe/China. Actions include inventory built for FY25 protection, dual-sourcing, shifting production where possible, and targeted pricing.

- Cost and structural actions: Management has announced a multi-year structural cost program (management referenced $370 million of savings in the discussion and detailed ongoing productivity plus additional programs) intended to create headroom to invest in brands, protect margins and improve EBITDA over time. These changes are described as structural (not temporary belt-tightening) and include centralizing/streamlining support functions, regionalizing commercial decision-making (new English-speaking region led for U.S./UK/Canada/Australia/NZ) to increase speed and agility, and continued technology/Demand Planning consolidation.

- Channel / inventory dynamics: Retailers (including Amazon and other e-commerce players) are highly disciplined and tightening inventories, producing sell-in vs sell-out disconnects (notably in the U.S.). Management is working to reconcile sell-in and sell-out and expects improvements in FY26 as initiatives and new launches roll out.

- Financial posture: Coty highlights gross margin expansion, stronger cash generation and significant deleveraging over the past four years. Management expects to continue EBITDA margin improvement over time (some FY26 reversals expected from timing/one-offs but a multi-year margin pathway remains).