Coty Inc

Latest Results (13.05.2026):

Coty Inc. reported results for the third quarter of fiscal 2026 (quarter ended March 31, 2026). Revenue was essentially stable on a reported basis but softer on a like‑for‑like basis, the company delivered profit results ahead of expectations after cost control and investment reallocation, and management implemented the Coty.Curated strategic framework while taking a large non‑cash impairment in the Consumer Beauty business that drove a reported operating loss. Key adjusted and cash metrics were weaker year‑over‑year but FY‑to‑date cash generation improved.

Headline financials

Q3 net revenue $1,281.6M (‑1% reported, ‑7% LFL). Reported operating loss $372.0M driven largely by a $362.8M impairment in Consumer Beauty; adjusted operating income $72.4M (‑51% YoY). Reported net loss attributable to common shareholders $411.4M; adjusted net loss $27.2M. Reported diluted EPS (common) ‑$0.47; adjusted diluted EPS ‑$0.03.

Profitability and adjustments

Reported gross margin 61.8% (down ~230 bps YoY); adjusted gross margin also 61.8% (down ~250 bps). Adjusted EBITDA for Q3 was $127.0M (‑38% YoY). Q3 included a $362.8M non‑cash impairment to Consumer Beauty reflecting lower revenue forecasts and a higher WACC; mark‑to‑market on the equity swap reduced results by ~$40.7M in Q3.

Cash flow and balance sheet

Q3 cash used in operations was $203.1M and free cash flow was a $248.7M outflow. However, nine months ended March 31, 2026 cash flow from operations improved to $421.8M and free cash flow to $275.6M. Total debt at quarter end $3,216.2M; financial net debt $2,959.1M and reported net leverage ~3.4x (net debt / adjusted EBITDA).

Segment performance

Prestige: Q3 net revenue $830.9M (flat reported, ‑5% LFL) with adjusted operating income $123.7M. Consumer Beauty: Q3 net revenue $450.7M (‑4% reported, ‑10% LFL) and a reported operating loss driven by the impairment; adjusted operating loss $51.3M.

Regional trends

Americas Q3 revenue $510.4M (‑4% reported, ‑6% LFL) with pressure in U.S./Canada. EMEA $597.6M (‑2% reported, ‑11% LFL) impacted by weaker Middle East sales. Asia Pacific grew to $173.6M (+9% reported, +5% LFL) led by China, Korea and travel retail.

Outlook and guidance

Coty expects Q4 FY26 LFL revenue to decline mid‑single digits (includes a ~2–3% estimated headwind from the Middle East). FY26 adjusted EBITDA guide $838M–$848M and adjusted EPS (ex equity swap) $0.33–$0.35; Q4 adjusted EBITDA expected $85M–$95M with Q4 adjusted EPS (ex equity swap) roughly breakeven to a loss of $0.02. Q4 free cash flow expected to be neutral to moderately positive.

Strategy and corporate actions

Management is implementing the Coty.Curated strategic framework to focus investments, reduce smaller launches, lower marketing asset costs (including expanded AI use), simplify operations and prioritize core brands. The Board added five independent directors, Coty repaid remaining 2026 bond maturities (Apr 15, 2026), and the company highlighted ESG and AI recognitions (MSCI upgrade to AA, SBTi net‑zero validation, Newsweek AI award).

Investor takeaways

Q3 FY2026 shows management beginning to stabilize operations and protect Q4 commercial investments, but results reflect near‑term headwinds (Middle East disruption, tariffs, excess & obsolescence) and a significant non‑cash impairment in Consumer Beauty. Adjusted profitability and FY‑to‑date cash generation provide some offset, while FY27 actions under Coty.Curated aim to improve execution and deleverage over time.