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)--May 05, 2026--
Regulatory News:
Coty Inc. $(COTY)$ (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 Nine Months Ended March 31, 2026
------------------------------------ ------------------------------------
(in millions,
except per
share data) Change YoY Change YoY
---------------------- ----------------------
Reported Reported
COTY INC. Basis $(LFL)$(a) Basis (LFL)(a)
-------------- ------------ ---------- ---------- ------------ ---------- ----------
Net revenues $1,281.6 (1%) (7%) $4,537.4 (2%) (6%)
Gross Margin -
reported 61.8% 63.5%
Gross Margin -
adjusted* 61.8% 63.6%
Operating
income -
reported (372.0) (33%) (38.8) <(100%)
Net (loss)
income
attributable
to common
shareholders -
reported ** (411.4) (1%) (473.7) (53%)
Operating
income -
adjusted* 72.4 (51%) 587.2 (25)%
Net income
attributable
to common
shareholders -
adjusted* ** (27.2) <(100%) 198.5 (15)%
EBITDA -
adjusted* 127.0 (38%) 753.3 (21)%
EPS
attributable
to common
shareholders
(diluted) -
reported $ (0.47) --% $ (0.54) (50%)
EPS
attributable
to common
shareholders
(diluted) -
adjusted* $ (0.03) <(100%) $ 0.23 (15%)
Cash flow from
operations (203.1) 421.8
Free cash flow* (248.7) 275.6
--------------- ------- ---------- ---------- ------- ---------- ----------
(a) LFL results for the three and nine months ended March 31, 2026 include immaterial help
from Argentina resulting from significant price increases due to hyperinflation.
* These measures, as well as "financial net debt," are Non-GAAP Financial Measures. Refer
to "Non-GAAP Financial Measures" for discussion of these measures. Reconciliations from
reported to adjusted results can be found at the end of this release.
** Net income for Coty Inc. is net of the Convertible Series B Preferred Stock dividends.
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.
Third Quarter Fiscal 2026 Business Review by Segment
---------------------------------------------------------------------------------------------------------------------------------
Three Months Ended March 31, Nine Months Ended March 31,
------------------------------------------------------- -------------------------------------------------------
LFL(a) LFL(a)
Change Change Change Change
(in millions) 2026 2025 YoY YoY Margin(b) 2026 2025 YoY YoY Margin(b)
-------------- ------- ------- --------- --------- ----------- ------- ------- --------- --------- -----------
Net Revenue:
Prestige $ 830.9 $ 829.4 0% (5%) $3,034.0 $3,059.6 (1%) (5%)
Consumer
Beauty 450.7 469.7 (4%) (10%) 1,503.4 1,580.9 (5%) (9%)
------- ------- ------- -------
Total Net
Revenue $1,281.6 $1,299.1 (1%) (7%) $4,537.4 $4,640.5 (2%) (6%)
======= ======= ======= =======
Reported
Operating
Income
(Loss):
Prestige $ 58.4 $ 78.7 (26%) 7.0% $ 449.2 $ 542.5 (17%) 14.8%
Consumer
Beauty (423.3) (189.5) <(100%) (93.9)% (412.7) (111.4) <(100%) (27.5)%
Corporate (7.1) (169.6) 96% N/A (75.3) (205.5) 63% N/A
------- ------- ------- -------
Total Reported
Operating
(Loss) Income $ (372.0) $ (280.4) (33%) (29.0)% $ (38.8) $ 225.6 <(100%) (0.9)%
======= ======= ======= =======
Adjusted
Operating
Income
(Loss):
Prestige $ 123.7 $ 158.8 (22%) 14.9% 609.6 $ 698.5 (13%) 20.1%
Consumer
Beauty (51.3) (10.9) <(100%) (11.4)% (22.4) 86.7 <(100%) (1.5)%
------- ------- ------- -------
Total Adjusted
Operating
Income $ 72.4 $ 147.9 (51%) 5.6% $ 587.2 $ 785.2 (25%) 12.9%
======= ======= ======= =======
Adjusted
EBITDA:
Prestige $ 150.6 $ 185.9 (19%) 18.1% $ 693.1 $ 781.7 (11%) 22.8%
Consumer
Beauty (23.6) 18.3 <(100%) (5.2)% 60.2 173.3 (65%) 4.0%
------- ------- ------- -------
Total Adjusted
EBITDA $ 127.0 $ 204.2 (38%) 9.9% $ 753.3 $ 955.0 (21%) 16.6%
======= ======= ======= =======
(a) Consolidated, Prestige, and Consumer Beauty LFL results for the three and nine months ended March 31, 2026 include immaterial
help from Argentina resulting from significant price increases due to hyperinflation.
(b) The margin of each of the items included for each segment is calculated as a percentage of the divisional net revenues.
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.
Third Quarter Fiscal 2026 Business Review by Region
-----------------------------------------------------------------------------------------------------
Three Months Ended March 31, Nine Months Ended March 31,
----------------------------------------- -----------------------------------------
Net Revenues Change YoY Net Revenues Change YoY
------------------- -------------------- ------------------- --------------------
Reported Reported
(in millions) 2026 2025 Basis LFL(a) 2026 2025 Basis LFL(a)
-------------- ------- -------- ---------- -------- ------- -------- ---------- --------
Americas $ 510.4 $ 529.7 (4)% (6)% $1,784.5 $ 1,861.8 (4)% (5)%
EMEA 597.6 610.0 (2)% (11)% 2,216.6 2,237.6 (1)% (8)%
Asia Pacific 173.6 159.4 9% 5% 536.3 541.1 (1)% (2)%
------- -------- --- ---- ---- ------- -------- --- --- ---
Total $1,281.6 $ 1,299.1 (1)% (7)% $4,537.4 $ 4,640.5 (2)% (6)%
======= ======== ======= ========
(a) Americas LFL results for the three and nine months ended March 31, 2026 include immaterial help
from Argentina resulting from significant price increases due to hyperinflation.
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. These forward-looking statements are generally identified by words or phrases, such as "anticipate", "are going to", "estimate", "plan", "project", "expect", "believe", "intend", "foresee", "forecast", "will", "may", "should", "outlook", "continue", "temporary", "target", "aim", "potential", "goal" and similar words or phrases. These statements are based on certain assumptions and estimates that we consider reasonable, but are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual events or results (including our financial condition, results of operations, cash flows and prospects) to differ materially from such statements, including risks and uncertainties relating to:
-- the Company's ability to successfully implement its strategic
priorities (including leveraging its leadership position and capabilities
in global fragrances to fuel strong expansion and continue to grow its
footprint and diversification in a limited number of structurally
profitable and growing beauty categories and geographic markets at scale),
achieve the benefits contemplated by the Company's strategic initiatives
(including revenue growth, cost control, gross margin growth and debt
deleveraging), and compete effectively in the beauty industry, in each
case within the expected time frame or at all;
-- the Company's ability to anticipate, gauge and respond to market trends
and consumer preferences, which may change rapidly, and the market
acceptance of new products, including new products in the Company's
skincare and prestige cosmetics portfolios, any relaunched or rebranded
products and the anticipated costs and discounting associated with such
relaunches and rebrands, and consumer receptiveness to the Company's
current and future marketing philosophy and consumer engagement
activities (including digital marketing and media) and the Company's
ability to effectively manage its production and inventory levels in
response to demand;
-- use of estimates and assumptions in preparing the Company's financial
statements, including with regard to revenue recognition, income taxes
(including the expected timing and amount of the release of any tax
valuation allowance), the assessment of goodwill, other intangible and
long-lived assets for impairments, and the market value of inventory;
-- the impact of any future impairments;
-- managerial, transformational, operational, regulatory, legal and
financial risks, including diversion of management attention to and
management of cash flows, expenses and costs associated with the
Company's transformation agenda, its global business strategies, the
integration and management of the Company's strategic partnerships, the
strategic review of its consumer beauty business, and future strategic
initiatives, and, in particular, the Company's ability to manage and
execute many initiatives simultaneously including any resulting
complexity, employee attrition or diversion of resources;
-- the timing, costs and impacts of divestitures and the amount and use of
proceeds from any such transactions;
-- future divestitures and the impact thereof on, and future acquisitions,
new licenses and joint ventures and the integration thereof with, our
business, operations, systems, financial data and culture and the ability
to realize synergies, manage supply chain challenges and other business
disruptions, reduce costs (including through the Company's cash
efficiency initiatives), avoid liabilities and realize potential
efficiencies and benefits (including through our restructuring
initiatives) at the levels and at the costs and within the time frames
contemplated or at all;
-- increased competition, consolidation among retailers, shifts in
consumers' preferred distribution and marketing channels (including to
digital and prestige channels), distribution and shelf-space resets or
reductions, compression of go-to-market cycles, changes in product and
marketing requirements by retailers, reductions in retailer inventory
levels and order lead-times or changes in purchasing patterns, impact
from public health events on retail revenues, and other changes in the
retail, e-commerce and wholesale environment in which the Company does
business and sells its products and the Company's ability to respond to
such changes (including its ability to expand its digital,
direct-to-consumer and e-commerce capabilities within contemplated
timeframes or at all);
-- the Company and its joint ventures', business partners' and licensors'
abilities to obtain, maintain and protect the intellectual property used
in its and their respective businesses, protect its and their respective
reputations (including those of its and their executives or influencers),
public goodwill, and defend claims by third parties for infringement of
intellectual property rights;
-- any change to the Company's capital allocation and/or cash management
priorities, including any change in the Company's dividend policy and any
change in our stock repurchase plans;
-- any unanticipated problems, liabilities or integration or other
challenges associated with a past or future acquired business, joint
ventures or strategic partnerships which could result in increased risk
or new, unanticipated or unknown liabilities, including with respect to
environmental, competition and other regulatory, compliance or legal
matters, and specifically in connection with the Company's strategic
partnerships, risks related to the entry into a new distribution channel,
the potential for channel conflict, risks of retaining customers and key
employees, difficulties of integration (or the risks associated with
limiting integration) and management of the partnerships, the Company's
relationships with its strategic partners, the Company's ability to
protect trademarks and brand names, litigation or investigations by
governmental authorities, and changes in law, regulations and policies
that affect the business or products of the Company's strategic
partnerships, including risk that direct selling laws and regulations may
be modified, interpreted or enforced in a manner that results in a
negative impact to the' business model, revenue, sales force or business
of any of the Company's strategic partnerships;
-- the Company's international operations and joint ventures, including
enforceability and effectiveness of its joint venture agreements and
reputational, compliance, regulatory, economic and foreign political
risks, including difficulties and costs associated with maintaining
compliance with a broad variety of complex local and international
regulations;
-- the Company's dependence on certain licenses (especially in the
fragrance category) and the Company's ability to renew expiring licenses
on favorable terms or at all;
-- the Company's dependence on entities performing outsourced functions,
including outsourcing of distribution functions, and third-party
manufacturers, logistics and supply chain suppliers, and other suppliers,
including third-party software providers, web-hosting and e-commerce
providers;
-- administrative, product development and other difficulties in meeting
the expected timing of market expansions, product launches, re-launches
and marketing efforts, including in connection with new products in the
Company's skincare and prestige cosmetics portfolios;
-- changes in the demand for the Company's products due to declining or
depressed global or regional economic conditions, and declines in
consumer confidence or spending, whether related to the economy (such as
austerity measures, tax increases, high fuel costs, or higher
unemployment), wars and other hostilities and armed conflicts, natural or
other disasters, weather, pandemics, security concerns, terrorist attacks
or other factors;
-- global political and/or economic uncertainties, disruptions or major
regulatory or policy changes, and/or the enforcement thereof that affect
the Company's business, financial performance, operations or products,
including the impact of the war in Ukraine and any escalation or
expansion thereof, war in the Middle East and any escalation or expansion
thereof, the current administration in the U.S. and related changes to
regulatory and trade policies, changes in the U.S. tax code and/or tax
regulations in other jurisdictions where the Company operates (including
recent and pending implementation of the global minimum corporate tax
(part of the "Pillar Two Model Rules") that may impact the Company's tax
liability in the European Union), and recent changes and future changes
in tariffs, retaliatory or trade protection measures, trade policies and
other international trade regulations in the U.S., the European Union and
Asia and in other regions where the Company operates (and the Company's
ability to manage the impact of such changes), potential regulatory
limits on payment terms in the European Union, future changes in
sanctions regulations, recent and future changes in regulations impacting
the beauty industry, including regulatory measures addressing products,
formulations, raw materials and packaging, and recent and future
regulatory measures restricting or otherwise impacting the use of web
sites, mobile applications or social media platforms that the Company
uses in connection with its digital marketing and e-commerce activities;
-- currency exchange rate volatility and currency devaluation and/or
inflation;
-- the impact of ongoing wars and geo-political uncertainty on capital
markets and the related impact on the Company's ability to refinance
outstanding debt at favorable rates;
-- the Company's ability to implement and maintain pricing actions to
effectively mitigate increased costs and inflationary pressures, and the
reaction of customers or consumers to such pricing actions;
-- the number, type, outcomes (by judgment, order or settlement) and costs
of current or future legal, compliance, tax, regulatory or administrative
proceedings, investigations and/or litigation, including product
liability cases (including asbestos and talc-related litigation for which
indemnities and/or insurance may not be available), distributor or
licensor litigation, and compliance, litigation or investigations
relating to the Company's joint ventures or strategic partnerships;
-- the Company's ability to manage seasonal factors and other variability
and to anticipate future business trends and needs;
-- disruptions in the availability and distribution of raw materials and
components needed to manufacture the Company's products, and the
Company's ability to effectively manage its production and inventory
levels in response to supply challenges;
-- disruptions in operations, sales and in other areas, including due to
disruptions in our supply chain, restructurings and other business
alignment activities, manufacturing or information technology systems,
labor disputes, extreme weather and natural disasters, impact from public
health events, the outbreak of war or hostilities (including the war in
Ukraine and armed conflict in the Middle East and any escalation or
expansion thereof), the impact of global supply chain challenges or other
disruptions in the international flow of goods (including disruptions
arising from the closure of strategic airspaces or critical maritime
routes or from changing tariff scenarios), and the impact of such
disruptions on the Company's ability to generate profits, stabilize or
grow revenues or cash flows, comply with its contractual obligations and
accurately forecast demand and supply needs and/or future results;
-- the Company's ability to adapt its business to address climate change
concerns, including through the implementation of new or unproven
technologies or processes, and to respond to increasing governmental and
regulatory measures relating to environmental, social and governance
matters, including expanding mandatory and voluntary reporting, diligence
and disclosure, as well as new taxes (including on energy and plastic),
new diligence requirements and the impact of such measures or processes
on its costs, business operations and strategy;
-- restrictions imposed on the Company through its license agreements,
credit facilities and senior unsecured bonds or other material contracts,
its ability to generate cash flow to repay, refinance or recapitalize
debt and otherwise comply with its debt instruments, and changes in the
manner in which the Company finances its debt and future capital needs;
-- increasing dependency on information technology, including as a result
of expanded use of AI and advanced analytics in the Company's operations
as well as remote working practices, and the Company's ability or the
ability of any of the third-party service providers the Company uses to
support its business, to protect against service interruptions, data
corruption, cyber-based attacks or network security breaches, including
ransomware attacks, costs and timing of implementation and effectiveness
of any upgrades or other changes to information technology systems, and
the cost of compliance or the Company's failure to comply with any
privacy or data security laws (including the European Union General Data
Protection Regulation, the California Consumer Privacy Act and similar
state laws, the Brazil General Data Protection Law, and the China Data
Security Law and Personal Information Protection Law) or to protect
against theft of customer, employee and corporate sensitive information;
-- the Company's ability to attract and retain key personnel and the
impact of senior management transitions;
-- the distribution and sale by third parties of counterfeit and/or gray
market versions of the Company's products;
-- the impact of the Company's ongoing strategic transformation agenda and
continued process improvements on the Company's relationships with key
customers and suppliers and certain material contracts;
-- the Company's relationship with JAB Beauty B.V., as the Company's
majority stockholder, and its affiliates, and any related conflicts of
interest or litigation;
-- the Company's relationship with KKR, whose affiliates are investors in
the Wella Business following the sale of the Company's remaining stake in
Wella, and any related conflicts of interest or litigation, and the
timing and terms of any future sale or initial public offering of Wella;
-- future sales of a significant number of shares by the Company's
majority stockholder or the perception that such sales could occur; and
-- other factors described elsewhere in this document and in documents
that the Company files with the SEC from time to time.
When used herein, the term "includes" and "including" means, unless the context otherwise indicates, "including without limitation". More information about potential risks and uncertainties that could affect the Company's business and financial results is included under the heading "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended June 30, 2025 and other periodic reports the Company has filed and may file with the SEC from time to time.
All forward-looking statements made in this release are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this release, and the Company does not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.
Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance unless expressed as such, and should only be viewed as historical data.
Non-GAAP Financial Measures
To supplement the financial measures prepared in accordance with GAAP, we use non-GAAP financial measures for Coty Inc. including Adjusted operating income (loss), Adjusted EBITDA, Adjusted net income (loss), and Adjusted net income (loss) attributable to Coty Inc. to common stockholders (collectively, the "Adjusted Performance Measures"). The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in tables below. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for or superior to, financial measures reported in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies, including companies in the beauty industry, may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
Despite the limitations of these non-GAAP financial measures, our management uses the Adjusted Performance Measures as key metrics in the evaluation of our performance and annual budgets and to benchmark performance of our business against our competitors. The following are examples of how these Adjusted Performance Measures are utilized by our management:
-- strategic plans and annual budgets are prepared using the Adjusted
Performance Measures;
-- senior management receives a monthly analysis comparing budget to
actual operating results that is prepared using the Adjusted Performance
Measures; and
-- senior management's annual compensation is calculated, in part, by
using some of the Adjusted Performance Measures.
In addition, our financial covenant compliance calculations under our debt agreements are substantially derived from these Adjusted Performance Measures.
Our management believes that Adjusted Performance Measures are useful to investors in their assessment of our operating performance and the valuation of the Company. In addition, these non-GAAP financial measures address questions we routinely receive from analysts and investors and, in order to ensure that all investors have access to the same data, our management has determined that it is appropriate to make this data available to all investors. The Adjusted Performance Measures exclude the impact of certain items (as further described below) and provide supplemental information regarding our operating performance. By disclosing these non-GAAP financial measures, our management intends to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We provide disclosure of the effects of these non-GAAP financial measures by presenting the corresponding measure prepared in conformity with GAAP in our financial statements, and by providing a reconciliation to the corresponding GAAP measure so that investors may understand the adjustments made in arriving at the non-GAAP financial measures and use the information to perform their own analyses.
Adjusted operating income/Adjusted EBITDA excludes restructuring costs and business structure realignment programs, amortization, acquisition- and divestiture-related costs and acquisition accounting impacts, stock-based compensation, and asset impairment charges and other adjustments as described below. For adjusted EBITDA, in addition to the preceding, we exclude adjusted depreciation as defined below. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. They are primarily incurred to realign our operating structure and integrate new acquisitions, and implement divestitures of components of our business, and fluctuate based on specific facts and circumstances. Additionally, Adjusted net income attributable to Coty Inc. and Adjusted net income attributable to Coty Inc. per common share are adjusted for certain interest and other (income) expense items, as described below, and the related tax effects of each of the items used to derive Adjusted net income as such charges are not used by our management in assessing our operating performance period-to-period.
Adjusted Performance Measures reflect adjustments based on the following items:
-- Costs related to acquisition and divestiture activities: The Company
has excluded acquisition- and divestiture-related costs and the
accounting impacts such as those related to transaction costs and costs
associated with the revaluation of acquired inventory in connection with
business combinations because these costs are unique to each transaction.
Additionally, for divestitures, the Company excludes write-offs of assets
that are no longer recoverable and contract related costs due to the
divestiture. The nature and amount of such costs vary significantly based
on the size and timing of the acquisitions and divestitures, and the
maturities of the businesses being acquired or divested. Also, the size,
complexity and/or volume of past transactions, which often drives the
magnitude of such expenses, may not be indicative of the size, complexity
and/or volume of any future acquisitions or divestitures.
-- Restructuring and other business realignment costs: The Company has
excluded costs associated with restructuring and business structure
realignment programs to allow for comparable financial results to
historical operations and forward-looking guidance. In addition, the
nature and amount of such charges vary significantly based on the size
and timing of the programs. By excluding the referenced expenses from the
non-GAAP financial measures, management is able to further evaluate the
Company's ability to utilize existing assets and estimate their long-term
value. Furthermore, our management believes that the adjustment of these
items supplements the GAAP information with a measure that can be used to
assess the sustainability of our operating performance.
-- Asset impairment charges: The Company has excluded the impact of asset
impairments as such non-cash amounts are inconsistent in amount and
frequency and are significantly impacted by the timing and/or size of
acquisitions. Our management believes that the adjustment of these items
supplements the GAAP information with a measure that can be used to
assess the sustainability of our operating performance.
-- Amortization expense: The Company has excluded the impact of
amortization of finite-lived intangible assets, as such non-cash amounts
are inconsistent in amount and frequency and are significantly impacted
by the timing and/or size of acquisitions. Our management believes that
the adjustment of these items supplements the GAAP information with a
measure that can be used to assess the sustainability of our operating
performance. Although we exclude amortization of intangible assets from
our non-GAAP expenses, our management believes that it is important for
investors to understand that such intangible assets contribute to revenue
generation. Amortization of intangible assets that relate to past
acquisitions will recur in future periods until such intangible assets
have been fully amortized. Any future acquisitions may result in the
amortization of additional intangible assets.
-- Gain or loss on sale and early license termination: The Company has
excluded the impact of gain or loss on sale and early license termination
as such amounts are inconsistent in amount and frequency and are
significantly impacted by the size of the sale and early license
termination.
-- Costs related to market exit: The Company has excluded the impact of
direct incremental costs related to our decision to wind down our
business operations in Russia. We believe that these direct and
incremental costs are inconsistent and infrequent in nature. Consequently,
our management believes that the adjustment of these items supplements
the GAAP information with a measure that can be used to assess the
sustainability of our operating performance.
-- Gains on sale of real estate: The Company has excluded the impact of
gains on sale of real estate as such amounts are inconsistent in amount
and frequency and are significantly impacted by the size of the sale. Our
management believes that the adjustment of these items supplements the
GAAP information with a measure that can be used to assess the
sustainability of our operating performance.
-- Stock-based compensation: Although stock-based compensation is a key
incentive offered to our employees, we have excluded the effect of these
expenses from the calculation of adjusted operating income and adjusted
EBITDA. This is due to their primarily non-cash nature; in addition, the
amount and timing of these expenses may be highly variable and
unpredictable, which may negatively affect comparability between
periods.
-- Depreciation and Adjusted depreciation: Our adjusted operating income
excludes the impact of accelerated depreciation for certain restructuring
projects that affect the expected useful lives of Property, Plant and
Equipment, as such charges vary significantly based on the size and
timing of the programs. Further, we have excluded adjusted depreciation,
which represents depreciation expense net of accelerated depreciation
charges, from our adjusted EBITDA. Our management believes that the
adjustment of these items supplements the GAAP information with a measure
that can be used to assess the sustainability of our operating
performance.
-- Other (income) expense: The Company has excluded the impact of pension
curtailment (gains) and losses and pension settlements as such events are
triggered by our restructuring and other business realignment activities
and the amount of such charges vary significantly based on the size and
timing of the programs. Further, we have excluded realized and unrealized
gains and losses on the investment in Wella, as well as expenses related
to potential or actual sales transactions reducing equity investments, as
our management believes these unrealized gains and losses do not reflect
our underlying ongoing business, and the adjustment of such impact helps
investors and others compare and analyze performance from period to
period. Such transactions do not reflect our operating results and we
have excluded the impact as our management believes that the adjustment
of these items supplements the GAAP information with a measure that can
be used to assess the sustainability of our operating performance.
-- Noncontrolling interest: This adjustment represents the after-tax
impact of the non-GAAP adjustments included in Net income attributable to
noncontrolling interests based on the relevant noncontrolling interest
percentage.
-- Tax: This adjustment represents the impact of the tax effect of the
pretax items excluded from Adjusted net income. The tax impact of the
non-GAAP adjustments is based on the tax rates related to the
jurisdiction in which the adjusted items are received or incurred.
Additionally, adjustments are made for the tax impact of any intra-entity
transfer of assets and liabilities. Also, in connection with our market
exit in Russia, we have adjusted for the release of tax charges
previously taken related to certain direct incremental impacts of the
decision.
The Company has provided a quantitative reconciliation of the difference between the non-GAAP financial measures and the financial measures calculated and reported in accordance with GAAP. For a reconciliation of adjusted gross profit to gross profit, adjusted EPS (diluted) to EPS (diluted), and adjusted net revenues to net revenues, see the table entitled "Reconciliation of Reported to Adjusted Results for the Consolidated Statements of Operations." For a reconciliation of adjusted operating income to operating income and adjusted operating income margin to operating income margin, see the tables entitled "Reconciliation of Reported Operating Income (Loss) to Adjusted Operating Income" and "Reconciliation of Reported Operating Income (Loss) to Adjusted Operating Income by Segment." For a reconciliation of adjusted effective tax rate to effective tax rate, see the table entitled "Reconciliation of Reported Income (Loss) Before Income Taxes and Effective Tax Rates to Adjusted Income Before Income Taxes and Adjusted Effective Tax Rates." For a reconciliation of adjusted net income and adjusted net income margin to net income (loss), see the table entitled "Reconciliation of Reported Net Income (Loss) to Adjusted Net Income."
The Company also presents free cash flow, adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"), immediate liquidity, Financial Net Debt. Management believes that these measures are useful for investors because it provides them with an important perspective on the cash available for debt repayment and other strategic measures and provides them with the same measures that management uses as the basis for making resource allocation decisions. Free cash flow is defined as net cash provided by operating activities less capital expenditures; adjusted EBITDA is defined as adjusted operating income, excluding adjusted depreciation and non-cash stock-based compensation. Net debt or Financial Net Debt (which the Company referred to as "net debt" in prior reporting periods) is defined as total debt less cash and cash equivalents. For a reconciliation of Free Cash Flow, see the table entitled "Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow," for adjusted EBITDA, see the table entitled "Reconciliation of Adjusted Operating Income to Adjusted EBITDA" and for Financial Net Debt, see the tables entitled "Reconciliation of Total Debt to Financial Net Debt." Further, our immediate liquidity is defined as the sum of available cash and cash equivalents and available borrowings under our Revolving Credit Facility (please see table "Immediate Liquidity").
We operate on a global basis, with the majority of our net revenues generated outside of the U.S. Accordingly, fluctuations in foreign currency exchange rates can affect our results of operations. Therefore, to supplement financial results presented in accordance with GAAP, certain financial information is presented in "constant currency", excluding the impact of foreign currency exchange translations to provide a framework for assessing how our underlying businesses performed excluding the impact of foreign currency exchange translations. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We calculate constant currency information by translating current and prior-period results for entities reporting in currencies other than U.S. dollars into U.S. dollars using prior year foreign currency exchange rates. The constant currency calculations do not adjust for the impact of revaluing specific transactions denominated in a currency that is different to the functional currency of that entity when exchange rates fluctuate, or for the impacts of hyperinflation. The constant currency information we present may not be comparable to similarly titled measures reported by other companies.
These non-GAAP measures should not be considered in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
To the extent that the Company provides guidance, it does so only on a non-GAAP basis and does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for restructuring, integration and acquisition-related expenses, amortization expenses, non-cash stock-based compensation, adjustments to inventory, and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.
- Tables Follow -
COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March Nine Months Ended March
31, 31,
-------------------------- --------------------------
(in millions,
except per share
data) 2026 2025 2026 2025
------- ------- ------- -------
Net revenues $1,281.6 $1,299.1 $4,537.4 $4,640.5
Cost of sales 489.7 466.7 1,658.1 1,599.3
------- ------- ------- -------
as % of Net
revenues 38.2% 35.9% 36.5% 34.5%
Gross profit 791.9 832.4 2,879.3 3,041.2
Gross margin 61.8% 64.1% 63.5% 65.5%
Selling, general
and
administrative
expenses 727.0 777.5 2,363.0 2,382.8
as % of Net
revenues 56.7% 59.8% 52.1% 51.3%
Amortization
expense 74.5 45.9 187.9 141.3
Restructuring
costs (0.4) 76.6 4.4 78.7
Asset impairment
charges 362.8 212.8 362.8 212.8
------- ------- ------- -------
Operating (loss)
income (372.0) (280.4) (38.8) 225.6
as % of Net
revenues (29.0%) (21.6%) (0.9%) 4.9%
Interest expense,
net 33.7 47.9 121.7 164.1
Other expense,
net 53.2 132.3 359.9 332.8
------- ------- ------- -------
Loss before
income taxes (458.9) (460.6) (520.4) (271.3)
as % of Net
revenues (35.8%) (35.5%) (11.5%) (5.8%)
(Benefit)
provision for
income taxes (53.2) (58.4) (72.5) 9.6
------- ------- ------- -------
Net loss (405.7) (402.2) (447.9) (280.9)
as % of Net
revenues (31.7%) (31.0%) (9.9%) (6.1%)
Net income
attributable to
noncontrolling
interests 3.2 2.0 7.8 5.7
Net (loss) income
attributable to
redeemable
noncontrolling
interests (0.8) 1.5 8.1 12.5
------- ------- ------- -------
Net loss
attributable to
Coty Inc. $ (408.1) $ (405.7) $ (463.8) $ (299.1)
======= ======= ======= =======
Amounts
attributable to
Coty Inc.
Net loss $ (408.1) $ (405.7) $ (463.8) $ (299.1)
Convertible
Series B
Preferred Stock
dividends (3.3) (3.3) (9.9) (9.9)
------- ------- ------- -------
Net loss
attributable to
common
stockholders $ (411.4) $ (409.0) $ (473.7) $ (309.0)
======= ======= ======= =======
Earnings per
common share:
Basic for Coty
Inc. $ (0.47) $ (0.47) $ (0.54) $ (0.36)
Diluted for Coty
Inc.(a) $ (0.47) $ (0.47) $ (0.54) $ (0.36)
Weighted-average
common shares
outstanding:
Basic 879.9 872.1 876.5 870.4
Diluted(a)(b) 879.9 872.1 876.5 870.4
Depreciation -
Coty Inc. $ 54.6 $ 59.3 $ 166.1 $ 174.1
(a) Diluted EPS is adjusted by the effect of dilutive securities, including
awards under the Company's equity compensation plans, the convertible
Series B Preferred Stock, and the Forward Repurchase Contracts. When
calculating any potential dilutive effect of stock options, Series A
Preferred Stock, restricted stock, RSUs and PRSUs, the Company uses the
treasury method and the if-converted method for the Convertible Series B
Preferred Stock and the Forward Repurchase Contracts. The treasury method
typically does not adjust the net income attributable to Coty Inc., while
the if-converted method requires an adjustment to reverse the impact of
the preferred stock dividends of $3.3, and to reverse the impact of fair
market value losses/(gains) for contracts with the option to settle in
shares or cash of $40.7 and $60.1, respectively, if dilutive, for the
three months ended March 31, 2026 and 2025 on net income applicable to
common stockholders during the period. The if-converted method requires
an adjustment to reverse the impact of the preferred stock dividends of
$9.9, and to reverse the impact of fair market value losses/(gains) for
contracts with the option to settle in shares or cash of $105.8 and
$188.9, respectively, if dilutive, for the nine months ended March 31,
2026 and 2025 on net income applicable to common stockholders during the
period.
(b) For the three months ended March 31, 2026 and 2025, outstanding stock
options with rights to purchase 3.4 million shares of Common Stock were
anti-dilutive and excluded from the computation of diluted EPS. Series A
Preferred Stock had no dilutive effect, as the exchange right expired on
March 27, 2024. For the nine months ended March 31, 2026 and 2025,
outstanding stock options and Series A Preferred Stock with purchase or
conversion rights to purchase 3.4 million and 3.5 million weighted
average shares of Common Stock, respectively, were anti-dilutive and
excluded from the computation of diluted EPS.
RECONCILIATION OF REPORTED TO ADJUSTED RESULTS FOR THE CONSOLIDATED
STATEMENTS OF OPERATIONS
These supplemental schedules provide adjusted Non-GAAP financial
information and a quantitative reconciliation of the difference
between the Non-GAAP financial measure and the financial measure
calculated and reported in accordance with GAAP.
Three Months Ended March 31, 2026
---------------------------------------------------
COTY INC.
---------------------------------------------------
Reported Adjusted
(in millions) (GAAP) Adjustments(a) (Non-GAAP)
---------------- ------------------ ---------------- -------------
Net revenues $ 1,281.6 $ -- $ 1,281.6
Gross profit 791.9 -- 791.9
Gross margin 61.8% 61.8%
Operating income (372.0) 444.4 72.4
as % of Net
revenues (29.0%) 5.6%
Net (loss) income
attributable to
common
stockholders (411.4) 384.2 (27.2)
as % of Net
revenues (32.1%) (2.1%)
Adjusted EBITDA 127.0
as % of Net
revenues 9.9%
EPS (diluted) $ (0.47) $ (0.03)
Adjusted diluted EPS includes $0.05 hurt related to the net impact of
the Total Return Swaps in the three months ended March 31, 2026.
Three Months Ended March 31, 2025
---------------------------------------------------
COTY INC.
---------------------------------------------------
Reported Adjusted
(in millions) (GAAP) Adjustments(a) (Non-GAAP)
---------------- ------------------ ---------------- -------------
Net revenues $ 1,299.1 $ -- $ 1,299.1
Gross profit 832.4 3.0 835.4
Gross margin 64.1% 64.3%
Operating income (280.4) 428.3 147.9
as % of Net
revenues (21.6%) 11.4%
Net income
attributable to
common
stockholders (409.0) 415.8 6.8
as % of Net
revenues (31.5%) 0.5%
Adjusted EBITDA 204.2
as % of Net
revenues 15.7%
EPS (diluted) $ (0.47) $ 0.01
Adjusted diluted EPS includes $0.07 hurt related to the net impact of
the Total Return Swaps in the three months ended March 31, 2025.
(a) See "Reconciliation of Reported Net (Loss) Income, Adjusted
Operating Income and Adjusted EBITDA for Coty Inc" and "Reconciliation
of Reported Net (Loss) Income to Adjusted Net Income" for a detailed
description of adjusted items.
RECONCILIATION OF REPORTED TO ADJUSTED RESULTS FOR THE CONSOLIDATED
STATEMENTS OF OPERATIONS
These supplemental schedules provide adjusted Non-GAAP financial
information and a quantitative reconciliation of the difference
between the Non-GAAP financial measure and the financial measure
calculated and reported in accordance with GAAP.
Nine Months Ended March 31, 2026
---------------------------------------------------
COTY INC.
---------------------------------------------------
Reported Adjusted
(in millions) (GAAP) Adjustments(a) (Non-GAAP)
---------------- ------------------ ---------------- -------------
Net revenues $ 4,537.4 $ -- $ 4,537.4
Gross profit 2,879.3 6.7 2,886.0
Gross margin 63.5% 63.6%
Operating income (38.8) 626.0 587.2
as % of Net
revenues (0.9%) 12.9%
Net (loss) income
attributable to
common
stockholders (473.7) 672.2 198.5
as % of Net
revenues (10.4%) 4.4%
Adjusted EBITDA 753.3
as % of Net
revenues 16.6%
EPS (diluted) $ (0.54) $ 0.23
Adjusted diluted EPS includes $0.12 hurt related to the net impact of
the Total Return Swaps in the nine months ended March 31, 2026.
Nine Months Ended March 31, 2025
---------------------------------------------------
COTY INC.
---------------------------------------------------
Reported Adjusted
(in millions) (GAAP) Adjustments(a) (Non-GAAP)
---------------- ------------------ ---------------- -------------
Net revenues $ 4,640.5 $ -- $ 4,640.5
Gross profit 3,041.2 4.3 3,045.5
Gross margin 65.5% 65.6%
Operating income 225.6 559.6 785.2
as % of Net
revenues 4.9% 16.9%
Net income
attributable to
common
stockholders (309.0) 542.7 233.7
as % of Net
revenues (6.7%) 5.0%
Adjusted EBITDA 955.0
as % of Net
revenues 20.6%
EPS (diluted) $ (0.36) $ 0.27
Adjusted diluted EPS includes $0.21 hurt related to the net impact of
the Total Return Swaps in the nine months ended March 31, 2025.
(a) See "Reconciliation of Reported Net (Loss) Income to Adjusted
Operating Income, and Adjusted EBITDA" and "Reconciliation of Reported
Net (Loss) Income to Adjusted Net Income" for a detailed description
of adjusted items.
RECONCILIATION OF REPORTED NET (LOSS) INCOME TO ADJUSTED OPERATING INCOME AND ADJUSTED
EBITDA
COTY INC. Three Months Ended March 31, Nine Months Ended March 31,
----------------------------------- -----------------------------------
(in millions) 2026 2025 Change 2026 2025 Change
----------------- ------ ------ --------- ------ ------ ---------
Net loss $(405.7) $(402.2) (1%) $(447.9) $(280.9) (59%)
Net loss margin (31.7%) (31.0%) (9.9%) (6.1%)
(Benefit)
Provision for
income taxes (53.2) (58.4) 9% (72.5) 9.6 <(100%)
------ ------ ------ ------
Loss before income
taxes $(458.9) $(460.6) 0% $(520.4) $(271.3) (92%)
Interest
expense, net 33.7 47.9 (30%) 121.7 164.1 (26%)
Other expense,
net 53.2 132.3 (60%) 359.9 332.8 8%
------ ------ ------ ------
Reported Operating
(loss) income $(372.0) (280.4) (33%) $ (38.8) $ 225.6 <(100%)
Reported operating
(loss) income
margin (29.0%) (21.6%) (0.9%) 4.9%
Asset
impairment
charges 362.8 212.8 70% 362.8 212.8 70%
Amortization
expense 74.5 45.9 62% 187.9 141.3 33%
Restructuring
and other
business
realignment
costs 0.5 87.2 (99%) 16.6 90.6 (82%)
Stock-based
compensation 6.9 12.1 (43%) 39.3 44.6 (12%)
Early license
termination
and market
exit costs (0.3) 70.3 <(100%) 19.4 70.3 (72%)
------ ------ ------ ------
Total adjustments
to reported
operating income 444.4 428.3 4% 626.0 559.6 12%
------ ------ ------ ------
Adjusted Operating
income $ 72.4 $ 147.9 (51%) $ 587.2 $ 785.2 (25%)
------ ------ ------ ------
Adjusted operating
income margin 5.6% 11.4% 12.9% 16.9%
Adjusted
depreciation 54.6 56.3 (3%) 166.1 169.8 (2%)
------ ------ ------ ------
Adjusted EBITDA $ 127.0 $ 204.2 (38%) $ 753.3 $ 955.0 (21%)
====== ====== ====== ======
Adjusted EBITDA
margin 9.9% 15.7% 16.6% 20.6%
RECONCILIATIONS OF SEGMENT REPORTED OPERATING INCOME (LOSS) TO SEGMENT ADJUSTED OPERATING
INCOME (LOSS) AND SEGMENT ADJUSTED EBITDA
OPERATING INCOME, ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA- PRESTIGE SEGMENT
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------- ----------------------
(in millions) 2026 2025 Change % 2026 2025 Change %
---------------- ----- ----- ---------- ----- ----- ----------
Reported
operating
income $ 58.4 $ 78.7 (26%) $449.2 $542.5 (17%)
Reported
operating income
margin 7.0% 9.5% 14.8% 17.7%
Amortization
expense 65.3 37.2 76% 160.4 113.1 42%
Asset
impairment
charges -- 42.9 (100%) -- 42.9 (100%)
----- ----- ----- -----
Total adjustments
to reported
operating
income 65.3 80.1 (18%) 160.4 156.0 3%
----- ----- ----- -----
Adjusted
operating
income $123.7 158.8 (22%) $609.6 698.5 (13%)
===== ===== ===== =====
Adjusted
operating income
margin 14.9% 19.1% 20.1% 22.8%
Adjusted
depreciation 26.9 27.1 (1%) 83.5 83.2 0%
----- ----- ----- -----
Adjusted EBITDA $150.6 185.9 (19%) $693.1 781.7 (11%)
===== ===== ===== =====
Adjusted EBITDA
margin 18.1% 22.4% 22.8% 25.5%
OPERATING LOSS, ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA- CONSUMER BEAUTY SEGMENT
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------ ------------------------
(in millions) 2026 2025 Change % 2026 2025 Change %
---------------- ------ ------ ---------- ------ ------ ----------
Reported
operating loss $(423.3) $(189.5) <(100%) $(412.7) $(111.4) <(100%)
Reported
operating loss
margin (93.9%) (40.3%) (27.5%) (7.0%)
Amortization
expense 9.2 8.7 6% 27.5 28.2 (2%)
Asset
impairment
charges 362.8 169.9 >100% 362.8 169.9 >100%
------ ------ ------ ------
Total adjustments
to reported
operating
income 372.0 178.6 >100% 390.3 198.1 97%
------ ------ ------ ------
Adjusted
operating (loss)
income $ (51.3) (10.9) <(100%) $ (22.4) 86.7 <(100%)
====== ====== ====== ======
Adjusted
operating (loss)
income margin (11.4%) (2.3%) (1.5%) 5.5%
Adjusted
depreciation 27.7 29.2 (5%) 82.6 86.6 (5%)
------ ------ ------ ------
Adjusted EBITDA $ (23.6) 18.3 <(100%) $ 60.2 173.3 (65%)
====== ====== ====== ======
Adjusted EBITDA
margin (5.2%) 3.9% 4.0% 11.0%
OPERATING LOSS, ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA- CORPORATE
SEGMENT
Three Months Nine Months Ended
Ended March 31, March 31,
---------------- -----------------
(in millions) 2026 2025 Change % 2026 2025 Change %
----------------- ---- ------ ---------- ----- ------ ----------
Reported operating
loss $(7.1) $(169.6) 96% $(75.3) $(205.5) 63%
Reported
operating loss
margin N/A N/A N/A N/A
Restructuring
and other
business
realignment
costs 0.5 87.2 (99%) 16.6 90.6 (82%)
Stock-based
compensation 6.9 12.1 (43%) 39.3 44.6 (12%)
Early license
termination
and market
exit costs (0.3) 70.3 <(100%) 19.4 70.3 (72%)
---- ------ ----- ------
Total adjustments
to reported
operating loss 7.1 169.6 (96%) 75.3 205.5 (63%)
---- ------ ----- ------
Adjusted operating $ -- $ -- N/A $ -- $ -- N/A
income
==== ====== ===== ======
Adjusted operating N/A N/A N/A N/A
loss margin
Adjusted -- -- N/A -- -- N/A
depreciation
---- ------ ----- ------
Adjusted EBITDA $ -- $ -- N/A $ -- $ -- N/A
==== ====== ===== ======
Adjusted EBITDA N/A N/A N/A N/A
margin
RECONCILIATION OF REPORTED (LOSS) INCOME BEFORE INCOME TAXES AND EFFECTIVE TAX RATES TO ADJUSTED
INCOME BEFORE INCOME TAXES AND ADJUSTED EFFECTIVE TAX RATES FOR COTY INC.
Three Months Ended Three Months Ended
March 31, 2026 March 31, 2025
------------------------------------- -------------------------------------
(Benefit) (Benefit)
Income Provision Income Provision
before for Effective before for Effective
income income tax income income tax
(in millions) taxes taxes rate taxes taxes rate
-------------------- -------- -------------- ----------- -------- -------------- -----------
Reported Loss before
income taxes $(458.9) $ (53.2) 11.6% $(460.6) $ (58.4) 12.7%
Adjustments to
Reported Operating
Income (a) 444.4 428.3
Realized/unrealized
loss on investment
in Wella Company
(c) -- 53.0
Other adjustments (d) (1.1) 0.8
------ -------------- ------ --------------
Total Adjustments (b) 443.3 57.3 482.1 64.6
------ ------ ------ ------
Adjusted (Loss)
Income before income
taxes $ (15.6) $ 4.1 (26.3%) $ 21.5 $ 6.2 28.8%
====== ====== ====== ======
The adjusted effective tax rate was (26.3)% for the three months ended March 31, 2026 compared to 28.8% for the three months ended March 31, 2025. The difference is primarily due to a tax recovery benefit in Brazil recognized in the prior period.
Nine Months Ended Nine Months Ended
March 31, 2026 March 31, 2025
------------------------------------- ----------------------------------
(Benefit)
Income Provision Income Provision
before for Effective before for Effective
income income tax income income tax
(in millions) taxes taxes rate taxes taxes rate
-------------------- -------- -------------- ----------- -------- ----------- -----------
Reported (Loss)
income before income
taxes $(520.4) $ (72.5) 13.9% $(271.3) $ 9.6 (3.5)%
Adjustments to
Reported Operating
Income (a) 626.0 559.6
Realized/unrealized
loss on investment
in Wella Company
(c) 200.9 85.0
Other adjustments (d) (1.8) 0.4
------ -------------- ------ -----------
Total Adjustments (b) 825.1 147.7 645.0 97.2
------ ------ ------ -------
Adjusted Income
before income taxes
- Continuing
Operations $ 304.7 $ 75.2 24.7% $ 373.7 $ 106.8 28.6%
====== ====== ====== =======
The adjusted effective tax rate was 24.7% for the nine months ended March 31, 2026 compared to 28.6% for the nine months ended March 31, 2025. The difference is primarily due to a higher limitation on the deductibility of interest expense in the prior period.
(a) See a description of adjustments under "Reconciliation of Reported Net
Income to Adjusted Operating Income and Adjusted EBITDA for Coty Inc."
(b) The tax effects of each of the items included in adjusted income are
calculated in a manner that results in a corresponding income tax
expense/provision for adjusted income. In preparing the calculation, each
adjustment to reported income is first analyzed to determine if the adjustment
has an income tax consequence. The provision for taxes is then calculated
based on the jurisdiction in which the adjusted items are incurred, multiplied
by the respective statutory rates and offset by the increase or reversal of
any valuation allowances commensurate with the non-GAAP measure of
profitability. The total tax impact on adjustments in the prior period
includes a tax benefit of $10.0 on the resolution of uncertain tax positions
associated with the Company's exit from Russia in fiscal 2022.
(c) For the three months ended March 31, 2025, the amount represents the
unrealized (gain) loss recognized for the change in the fair value of the
investment in Wella.
For the nine months ended March 31, 2026, this primarily represents the
realized loss on the sale of the investment in Wella. For the nine months
ended March 31, 2025, this primarily represents unrealized loss recognized for
the change in fair value of the investment in Wella.
(d) For the three months ended March 31, 2026, this primarily represents
recovery of previously written-off non-income tax credits. For the three
months ended March 31, 2025, this primarily represents recovery of previously
written-off non-income tax credits, the amortization of basis differences in
certain equity method investments, and net loss on the sale of an equity
investment.
For the nine months ended March 31, 2026, this primarily represents recovery
of previously written-off non-income tax credits. For the nine months ended
March 31, 2025, this primarily represents recovery of previously written-off
non-income tax credits, the amortization of basis differences in certain
equity method investments, and net loss on the sale of an equity investment.
RECONCILIATION OF REPORTED NET (LOSS) INCOME TO ADJUSTED NET INCOME FOR COTY INC.
Three Months Ended March 31, Nine Months Ended March 31,
----------------------------------- -----------------------------------
(in millions) 2026 2025 Change 2026 2025 Change
------ ------ --------- ------ ------ ---------
Net loss attributable
to Coty Inc. $(408.1) $(405.7) (1%) $(463.8) $(299.1) (55%)
Convertible Series B
Preferred Stock
dividends (c) (3.3) (3.3) --% (9.9) (9.9) --%
------ ------ ------ ------
Reported Net loss
attributable to common
stockholders $(411.4) $(409.0) (1%) $(473.7) $(309.0) (53%)
% of Net revenues (32.1%) (31.5%) (10.4%) (6.7%)
Adjustments to
Reported Operating
income (a) 444.4 428.3 4% 626.0 559.6 12%
Realized/unrealized
loss on investment
in Wella Company
(d) -- 53.0 (100%) 200.9 85.0 >100%
Adjustments to other
expense (e) (1.1) 0.8 <(100%) (1.8) 0.4 <(100%)
Adjustments to
noncontrolling
interests (b) (1.8) (1.7) (6%) (5.2) (5.1) (2%)
Change in tax provision
due to adjustments to
Reported Net (loss)
income attributable to
Coty Inc. (57.3) (64.6) 11% (147.7) (97.2) (52%)
------ ------ ------ ------
Adjusted Net income
attributable to Coty
Inc. $ (27.2) $ 6.8 <(100%) $ 198.5 $ 233.7 (15%)
====== ====== ====== ======
% of Net revenues (2.1%) 0.5% 4.4% 5.0%
Per Share Data
Adjusted
weighted-average common
shares
Basic 879.9 872.1 876.5 870.4
Diluted (c)(f) 879.9 875.0 878.7 875.5
Adjusted Net income
attributable to Coty
Inc. per Common Share
Basic $ (0.03) $ 0.01 $ 0.23 $ 0.27
Diluted (c) $ (0.03) $ 0.01 $ 0.23 $ 0.27
Adjusted diluted EPS includes $0.05 hurt and $0.12 hurt related to the net impact of the Total
Return Swaps in the three and nine months ended March 31, 2026, respectively. Adjusted diluted
EPS includes $0.07 hurt and $0.21 hurt related to the net impact of the Total Return Swaps in the
three and nine months ended March 31, 2025, respectively.
(a) See a description of adjustments under "Net (Loss) Income, Adjusted
Operating Income and Adjusted EBITDA for Coty Inc."
(b) The amounts represent the after-tax impact of the non-GAAP adjustments
included in Net income attributable to noncontrolling interest based on
the relevant noncontrolling interest percentage in the Condensed
Consolidated Statements of Operations.
(c) Diluted EPS is adjusted by the effect of dilutive securities, including
awards under the Company's equity compensation plans, the Convertible
Series B Preferred Stock, and the Forward Repurchase Contracts. When
calculating any potential dilutive effect of stock options, Series A
Preferred Stock, restricted stock, and RSUs, the Company uses the
treasury method and the if-converted method for the Convertible Series B
Preferred Stock and the Forward Repurchase Contracts. The treasury method
typically does not adjust the net income attributable to Coty Inc., while
the if-converted method requires an adjustment to reverse the impact of
the preferred stock dividends of $3.3, and to reverse the impact of fair
market value losses for contracts with the option to settle in shares or
cash of $40.7 and $60.1, respectively, if dilutive, for the three months
ended March 31, 2026 and 2025 on net income applicable to common
stockholders during the period.
(d) For the nine months ended March 31, 2026, this represents the realized
loss on the sale of the investment in Wella. For the three and nine
months ended March 31, 2025, this represents unrealized loss recognized
for the change in fair value of the investment in Wella.
(e) For the three months ended March 31, 2026, this primarily represents
recovery of previously written-off non-income tax credits. For the three
months ended March 31, 2025, this primarily recovery of previously
written-off non-income tax credits, the amortization of basis differences
in certain equity method investments, and net loss on the sale of an
equity investment.
For the nine months ended March 31, 2026, this primarily represents
recovery of previously written-off non-income tax credits.. For the nine
months ended March 31, 2025, this primarily represents recovery of
previously written-off non-income tax credits, the amortization of basis
differences in certain equity method investments, and net loss on the
sale of an equity investment.
(f) Adjusted Diluted EPS is adjusted by the effect of dilutive securities.
For the three months ended March 31, 2026 and 2025, no dilutive shares of
the Forward Repurchase Contracts were included in the computation of
adjusted diluted EPS as their inclusion would be anti-dilutive.
Accordingly, we did not reverse the impact of the fair market value
losses for contracts with the option to settle in shares or cash of $40.7
and $60.1, respectively. For the three months ended March 31, 2026,
Convertible Series B Preferred Stock (23.7 million weighted average
dilutive shares) was anti-dilutive. Accordingly, we excluded these shares
from the diluted shares and did not adjust the earnings for the related
dividend of $3.3. For the three months ended March 31, 2025, Convertible
Series B Preferred Stock (23.7 million weighted average dilutive shares)
was anti-dilutive. Accordingly, we excluded these shares from the diluted
shares and did not adjust the earnings for the related dividend of $3.3.
Adjusted Diluted EPS is adjusted by the effect of dilutive securities.
For the nine months ended March 31, 2026 and 2025, no dilutive shares of
the Forward Repurchase Contracts were included in the computation of
adjusted diluted EPS as their inclusion would be anti-dilutive.
Accordingly, we did not reverse the impact of the fair market value
losses/(gains) for contracts with the option to settle in shares or cash
of $105.8 and $188.9 , respectively. For the nine months ended March 31,
2026, convertible Series B Preferred Stock (23.7 million weighted average
dilutive shares) were anti-dilutive. Accordingly, we excluded these
shares from the diluted shares and did not adjust the earnings for the
related dividend of $9.9. For the nine months ended March 31, 2025,
convertible Series B Preferred Stock (23.7 million weighted average
dilutive shares) were anti-dilutive. Accordingly, we excluded these
shares from the diluted shares and did not adjust the earnings for the
related dividend of $9.9.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING
ACTIVITIES TO FREE CASH FLOW
Three Months Ended Nine Months Ended
COTY INC. March 31, March 31,
------------------ --------------------
(in millions) 2026 2025 2026 2025
-------------- ------ ------ ------ ------
Net cash
provided by
operating
activities $(203.1) $(122.5) $ 421.8 $ 409.4
Capital
expenditures (45.6) (45.9) (146.2) (166.7)
------ ------ ------ ------
Free cash flow $(248.7) $(168.4) $ 275.6 $ 242.7
------ ------ ------ ------
RECONCILIATION OF TOTAL DEBT TO FINANCIAL NET DEBT
COTY INC. As of
(in millions) March 31, 2026
----------------------------------------- ----------------
Total debt(1) $ 3,216.2
Less: Cash and cash equivalents 257.1
--- -----------
Financial Net debt $ 2,959.1
=== ===========
(1) Total debt is derived from footnote 9 from the Form 10-Q for the
quarter-ended March 31, 2026 and includes both the Company's short-term and
long-term debt (including the current portion of long-term debt)
RECONCILIATION OF TTM(a) NET (LOSS) INCOME TO ADJUSTED OPERATING
INCOME AND ADJUSTED EBITDA
Twelve months ended
---------------------------------------------------
June December March
30, September 31, 31, March 31,
2025 30, 2025 2025 2026 2026
------- ---------- -------- -------- ----------
(in millions)
---------------- ------- ---------- -------- -------- ----------
Net (loss)
income $(69.3) $ 74.0 $(116.2) $(405.7) $(517.2)
(Benefit)
Provision for
income taxes on
continuing
operations $ (4.2) $ 33.1 $ (52.4) $ (53.2) $ (76.7)
----- --------- ------ ------ ------
(Loss) Income
before income
taxes $(73.5) $ 107.1 $(168.6) $(458.9) $(593.9)
Interest
expense, net $ 50.1 $ 46.6 $ 41.4 $ 33.7 $ 171.8
Other expense,
net $ 38.9 $ 31.3 $ 275.4 $ 53.2 $ 398.8
----- --------- ------ ------ ------
Reported
operating
(loss) income $ 15.5 $ 185.0 $ 148.2 $(372.0) $ (23.3)
----- --------- ------ ------ ------
Amortization
expense $ 45.6 $ 39.3 $ 74.1 $ 74.5 $ 233.5
Restructuring
and other
business
realignment
costs $ 1.2 $ 1.7 $ 14.3 $ 0.5 $ 17.7
Stock-based
compensation $ 5.4 $ 14.5 $ 18.0 $ 6.9 $ 44.8
Asset impairment
charges $ -- $ -- $ -- $ 362.8 $ 362.8
Early license
termination and
market exit
costs $ -- $ -- $ 19.7 $ (0.3) $ 19.4
----- --------- ------ ------ ------
Total
adjustments to
reported
operating loss $ 52.2 $ 55.5 $ 126.1 $ 444.4 $ 678.2
----- --------- ------ ------ ------
Adjusted
operating
income $ 67.7 $ 240.5 $ 274.3 $ 72.4 $ 654.9
----- --------- ------ ------ ------
Add: Adjusted
depreciation(b) $ 59.0 $ 55.6 $ 55.9 $ 54.6 $ 225.1
----- --------- ------ ------ ------
Adjusted EBITDA $126.7 $ 296.1 $ 330.2 $ 127.0 $ 880.0
===== ========= ====== ====== ======
(a) Trailing twelve months $(TTM)$ net (loss) income from continuing
operations, reported operating income, adjusted operating income, and
adjusted EBITDA represents the summation of each of these financial
metrics for the quarters ended March 31, 2026, December, 31, 2025,
September 30, 2025, and June 30, 2025.
(b) Adjusted depreciation for the twelve months ended March 31, 2026
represents depreciation expense for Coty Inc for the period, excluding
accelerated depreciation.
COMPARISON OF TOTAL DEBT/NET (LOSS) INCOME TO FINANCIAL NET DEBT/ADJUSTED
EBITDA
Numerator
------------------------------
Financial Net
Total Debt Debt(c)
---------- ------------------
$ 3,216.2 $ 2,959.1
------------------------ ----------------- --------- --- -------------
TTM Net
Denominator loss(b) $ (517.2) 6.2 N/R(d)
------------ ----------- --------- --------- ------------------
TTM Adjusted EBITDA(a) $ 880.0 N/R(d) 3.4
------------------------ --------- ---------- --- -------------
(a) TTM Adjusted EBITDA for the twelve months ended March 31, 2026 represents
the summation of Adjusted EBITDA for each of the quarters ended March 31,
2026, December 31, 2025, September 30, 2025, and June 30, 2025. For a
reconciliation of adjusted operating income to operating income for Coty
Inc. for each of those periods, see the table entitled "Reconciliation of
TTM of Net (Loss) Income to Adjusted Operating Income to Adjusted EBITDA"
for each of those periods.
(b) TTM net (loss) for the twelve months ended March 31, 2026 represents the
summation of net (loss) income for each of the quarters ended March 31,
2026, December 31, 2025, September 30, 2025, and June 30, 2025.
(c) Financial Net Debt equals Total Debt minus Cash and cash equivalents as
of March 31, 2026. See table titled "Reconciliation of Total Debt to
Financial Net Debt".
(d) Not relevant.
RECONCILIATION OF REPORTED NET REVENUES TO LIKE-FOR-LIKE NET REVENUES
Three Months Ended March 31, 2026 vs. Three Months Ended
March 31, 2025 Net Revenue Change
-----------------------------------------------------------
Net Impact from
Revenues Reported Constant Acquisitions and
Change YoY Basis Currency Divestitures(a) LFL(b)
----------- ------------- ----------- ----------------- ------------
Prestige -- % (5)% --% (5)%
Consumer
Beauty (4)% (10)% --% (10)%
--- ------ --- ---- ---- ---------- ---- ----
Total
Continuing
Operations (1)% (7)% --% (7)%
--- ------ --- ---- ---- ---------- ---- ----
Nine Months Ended March 31, 2026 vs. Nine Months Ended
March 31, 2025 Net Revenue Change
-----------------------------------------------------------
Net Impact from
Revenues Reported Constant Acquisitions and
Change YoY Basis Currency Divestitures(a) LFL(b)
----------- ------------- ------------ ----------------- -----------
Prestige (1)% (5)% --% (5)%
Consumer
Beauty (5)% (9)% --% (9)%
--- ------ --- ----- ---- ---------- ---- ---
Total
Continuing
Operations (2)% (6)% --% (6)%
--- ------ --- ----- ---- ---------- ---- ---
(a) There are no acquisitions, divestitures, early license terminations or
market exits that would impact the comparability of financial results
presented above.
(b) Consolidated, Prestige, and Consumer Beauty LFL results for the three and
nine months ended March 31, 2026 include immaterial help from Argentina
resulting from significant price increases due to hyperinflation.
COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, June 30,
(in millions) 2026 2025
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 257.1 $ 257.1
Restricted cash 13.1 13.3
Trade receivables, net 565.2 526.4
Inventories 786.3 794.5
Prepaid expenses and other current assets 313.8 362.0
-------- --------
Total current assets 1,935.5 1,953.3
Property and equipment, net 641.8 709.2
Goodwill 3,810.0 4,062.2
Other intangible assets, net 2,860.6 3,214.8
Equity investment -- 1,002.0
Operating lease right-of-use assets 230.9 265.7
Other noncurrent assets 750.1 700.5
-------- --------
TOTAL ASSETS $10,228.9 $11,907.7
======== ========
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 1,768.2 $ 1,890.0
Short-term debt and current portion of
long-term debt 2.1 3.5
Other current liabilities 586.0 644.8
-------- --------
Total current liabilities 2,356.3 2,538.3
Long-term debt, net 3,169.4 3,955.5
Long-term operating lease liabilities 189.8 221.8
Other noncurrent liabilities 1,011.7 1,236.5
-------- --------
TOTAL LIABILITIES 6,727.2 7,952.1
-------- --------
CONVERTIBLE SERIES B PREFERRED STOCK 142.4 142.4
REDEEMABLE NONCONTROLLING INTERESTS 85.7 94.2
Total Coty Inc. stockholders' equity 3,091.4 3,542.7
Noncontrolling interests 182.2 176.3
-------- --------
Total equity 3,273.6 3,719.0
-------- --------
TOTAL LIABILITIES, MEZZANINE EQUITY AND
STOCKHOLDERS' EQUITY $10,228.9 $11,907.7
======== ========
COTY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31,
-----------------------------------
2026 2025
----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (447.9) $ (280.9)
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities:
Depreciation and amortization 354.1 315.3
Non-cash lease expense 47.2 46.8
Deferred income taxes (156.3) (41.2)
Provision for bad debts 10.0 8.7
Provision for pension and other
post-employment benefits 8.3 8.2
Share-based compensation 39.2 44.7
Asset impairment charges 362.8 212.8
Other 364.8 424.9
Change in operating assets and
liabilities:
Trade receivables (47.1) (156.0)
Inventories 3.3 46.9
Prepaid expenses and other current
assets 44.1 23.3
Accounts payable and accrued
expenses (76.4) (111.1)
Other current liabilities 10.8 (113.2)
Operating lease liabilities (44.6) (42.7)
Other assets and liabilities, net (50.5) 22.9
----------- ----------
Net cash provided by operating
activities 421.8 409.4
----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (146.2) (166.7)
Proceeds from sale of equity
investments and related assets 750.0 74.0
Proceeds from contingent
consideration, license
agreements, and sale of other
long-lived assets, net 9.3 12.6
----------- ----------
Net cash provided by (used in)
investing activities 613.1 (80.1)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from short-term debt -- 5.0
Proceeds from revolving loan
facilities 1,373.6 1,951.3
Repayments of revolving loan
facilities (1,575.5) (1,562.7)
Proceeds from issuance of other
long-term debt 899.2 --
Repayments of other long-term debt (1,465.7) (490.6)
Dividend payment on Class A Common
Stock and Series B Preferred
Stock (9.9) (9.9)
Net proceeds from (payments of)
foreign currency contracts 11.4 (14.0)
Payments related to forward
repurchase contracts, including
hedge valuation adjustments (208.7) (282.3)
Refunds related to hedge valuation
adjustment -- 61.8
Distributions to redeemable
noncontrolling interests and
noncontrolling interests (17.0) (23.9)
Payments of deferred financing
fees and premium on bond
extinguishment (31.4) (2.0)
All other (12.0) (16.8)
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Net cash used in financing activities (1,036.0) (384.1)
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EFFECT OF EXCHANGE RATES ON CASH,
CASH EQUIVALENTS AND RESTRICTED
CASH 0.9 (6.4)
----------- ----------
NET DECREASE IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH (0.2) (61.2)
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH--Beginning of period 270.4 320.6
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CASH, CASH EQUIVALENTS AND RESTRICTED
CASH--End of period $ 270.2 $ 259.4
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CONTACT: 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
(END) Dow Jones Newswires
May 05, 2026 16:30 ET (20:30 GMT)