Core Viewpoint - Coty Inc., a century-old French perfume giant, is facing significant challenges, including declining performance across all business segments, plans to divest its mass cosmetics division, and the potential loss of the Gucci brand license, which could severely impact its revenue and profitability [1][28]. Financial Performance - For Q1 of fiscal year 2026, Coty's net revenue was $1.577 billion, a decrease of 6% year-over-year, and an 8% decline on a like-for-like basis [2][9]. - The reported net income was $64.6 million, down 19%, with a net profit margin of 4.1% [2][9]. - The mass beauty segment reported an operating loss of $7.7 million, with a loss rate of 1.5%, and an adjusted operating profit margin of 0.3%, down from 4.3% the previous year [9][28]. Business Segment Analysis - The high-end beauty segment generated $1.07 billion in net revenue, accounting for 68% of total sales, with a reported decline of 4% and a like-for-like decline of 6% [6][9]. - The mass beauty segment's net revenue was $508 million, representing 32% of total sales, with a reported decline of 9% and a like-for-like decline of 11% [6][9]. Regional Performance - All three major regions reported declines, with the Asia-Pacific region experiencing the largest drop of 9%, although there are signs of gradual improvement in the Chinese market [10][12]. - The European, Middle Eastern, and African markets, as the largest revenue source, saw a reported decline of 4% and a like-for-like decline of 9% [21][12]. Competitive Landscape - Coty is losing market share in the competitive global beauty landscape, particularly in the high-end fragrance segment, where it faces intense competition from companies like L'Oréal and Estée Lauder [24][28]. - The potential loss of the Gucci Beauty license, which contributes approximately 8% to Coty's sales and 11% to its profits, poses a significant risk to its future as an independent company [28][30]. Strategic Focus - Coty is focusing on optimizing its remaining high-end beauty operations and exploring new partnerships, while also emphasizing its core strength in the fragrance category [29][30]. - The company has appointed a new president for its mass beauty division, indicating a strategic shift aimed at addressing its current challenges [29].

Core Insights - Coty Inc. reported first-quarter fiscal 2026 results with both net sales and earnings missing Zacks Consensus Estimates, showing year-over-year declines in both metrics [1][3][10] Financial Performance - Adjusted earnings were 12 cents per share, below the expected 15 cents, and down from 15 cents in the prior year [3][10] - Net revenues totaled $1,577.2 million, a 6% decline year-over-year, missing the consensus estimate of $1,583 million [3][10] - On a like-for-like basis, net revenues decreased by 8%, driven by declines in both Prestige and Consumer Beauty segments [4] Segment Analysis Prestige Segment - Net revenues were $1,069.5 million, accounting for 68% of total sales, reflecting a 4% decline on a reported basis [8] - Adjusted operating income for the Prestige segment was $239 million, down from $279.7 million in the prior year, with an adjusted operating margin of 22.3% [9] - The segment is expected to benefit from new fragrance launches and improved performance in the second half of fiscal 2026 [10][11] Consumer Beauty Segment - Net revenues were $507.7 million, representing a 9% decline, with a reported operating loss of $7.7 million compared to an operating income of $14 million in the prior year [12][13] - The segment is focusing on reigniting growth through new innovations and expanding into digital channels [14][15] Regional Performance - The Americas segment reported net revenues of $649.6 million, a 6% decline, primarily due to lower Prestige revenues [16] - EMEA segment revenues were $754.8 million, reflecting a 4% decline, while Asia Pacific revenues were $172.8 million, down 9% [17][18] Financial Health - As of the end of the fiscal first quarter, Coty had cash and cash equivalents of $264.6 million and total debt of $4,069.3 million, resulting in a leverage ratio of 3.7x [19] Future Outlook - Management anticipates gradual improvement in sales trends through fiscal 2026, with expectations for stronger performance in the second quarter and the second half of the year [20][22] - Adjusted EBITDA is projected to decline in the second quarter before returning to growth later in the year, with a target of approximately $1 billion in adjusted EBITDA for fiscal 2026 [23]

Financial Data and Key Metrics Changes - Coty reported strong growth in several key brands over the past five years, with Burberry growing by 140%, Hugo Boss by 33%, Chloé by 70%, and Marc Jacobs by 50% [6][7] - The company emphasized that it remains in the top three for total global fragrances and for prestige fragrances, even without the Gucci license [6][7] Business Line Data and Key Metrics Changes - The exit from the Gucci license will allow Coty to focus on brands with the biggest long-term growth potential and optimize the remaining term of the Gucci brand [4][5] - Coty has seen significant growth in its ultra-premium brands, which currently represent only 1% of its business but are growing at 17% [41][42] Market Data and Key Metrics Changes - The U.S. fragrance market is experiencing mid-single-digit growth, with Coty expecting a good holiday season [23][30] - In EMEA, the prestige fragrance market is growing at low single digits, with the French market being less dynamic compared to the U.K. and Spain [58][59] Company Strategy and Development Direction - Coty plans to amplify new licenses and brands recently added to its portfolio while optimizing existing brands [4][5] - The company is committed to solidifying its position as a prestige beauty company with a focus on fragrance and scenting across various price points [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in the second half of the fiscal year, driven by strong innovation and market dynamics [30][31] - The company is actively managing risks in its portfolio, ensuring no single brand accounts for more than 10% of sales [9][18] Other Important Information - Coty is focused on maintaining a strong licensing model, with 85% of its portfolio being owned brands or long-term licenses [9][8] - The company is seeing a trend of consumers stacking scents, which is influencing product development and marketing strategies [49] Q&A Session Summary Question: Impact of exiting the Gucci license on Coty's portfolio - Management stated that exiting the Gucci license will allow for a more focused growth strategy on other brands with long-term potential [4][5] Question: Financial impact of the Gucci license transition to L'Oréal - Management acknowledged that losing the Gucci brand will have a profit impact but emphasized the focus on driving growth in other areas [17][18] Question: Performance expectations for Q2 - Management indicated that the fragrance market dynamics are strong, contributing to a favorable outlook for Q2 [23][30] Question: E-commerce impact on sell-in and sell-out dynamics - Management noted that e-commerce is growing rapidly, with no major difference in de-stocking between online and brick-and-mortar retailers [55][56] Question: Trends in the prestige fragrance market for the holiday season - Management expressed confidence in the resilience of the prestige fragrance category, expecting strong performance during the holiday season [64][65] Question: Strategic review outcomes and options - Management is assessing various options for the Brazilian business and color cosmetics, focusing on profitability and growth potential [75][76]

Financial Data and Key Metrics Changes - The meeting confirmed that all nine nominees for the election as directors were elected, indicating a stable governance structure [11] - The non-binding advisory vote on named executive officer compensation was approved, reflecting stockholder support for executive pay practices [11] - The ratification of Deloitte & Touche as the independent auditor was also approved, ensuring continuity in financial oversight [11] Business Line Data and Key Metrics Changes - No specific financial data or key metrics related to individual business lines were discussed in the meeting Market Data and Key Metrics Changes - No specific market data or key metrics were provided during the meeting Company Strategy and Development Direction and Industry Competition - The meeting did not delve into specific company strategies or competitive positioning within the industry Management's Comments on Operating Environment and Future Outlook - Management did not provide detailed comments on the operating environment or future outlook during the meeting Other Important Information - The meeting was conducted virtually to enhance participation among stockholders, demonstrating a commitment to cost efficiency and accessibility [2] - The company has appointed a third party as Inspector of Elections to ensure the integrity of the voting process [4] Q&A Session Summary - The Q&A session was scheduled to take place after the business portion of the meeting, but no specific questions or answers were recorded in the provided content [12]

For the quarter ended September 2025, Coty (COTY) reported revenue of $1.58 billion, down 5.6% over the same period last year. EPS came in at $0.12, compared to $0.15 in the year-ago quarter.The reported revenue represents a surprise of -0.35% over the Zacks Consensus Estimate of $1.58 billion. With the consensus EPS estimate being $0.15, the EPS surprise was -20%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next ...

分组1 - Coty reported quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.15 per share, and down from $0.15 per share a year ago, representing an earnings surprise of -20.00% [1] - The company posted revenues of $1.58 billion for the quarter ended September 2025, missing the Zacks Consensus Estimate by 0.35%, and down from $1.67 billion year-over-year [2] - Coty has not surpassed consensus EPS estimates over the last four quarters and has topped revenue estimates only once in that period [2] 分组2 - Coty shares have lost about 45% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The current consensus EPS estimate for the coming quarter is $0.19 on revenues of $1.64 billion, and for the current fiscal year, it is $0.43 on revenues of $5.88 billion [7] - The Zacks Industry Rank indicates that the Cosmetics industry is currently in the bottom 24% of over 250 Zacks industries, suggesting potential underperformance compared to higher-ranked industries [8]

Financial Data and Key Metrics Changes - In Q1, total net revenues declined 8% like-for-like, in line with expectations and guidance [4] - Adjusted EBITDA declined 18% in Q1, primarily due to lower sales and gross margin, partially offset by lower fixed costs [14] - Q1 adjusted gross margin was 64.5%, a decline of 100 basis points compared to the prior year [14] - Free cash flow in Q1 was $11 million, an improvement of $19 million versus last year [15] Business Line Data and Key Metrics Changes - In the prestige division, sales declined by 6% like-for-like in Q1, improving from a 7% decline in Q4 [5] - Consumer beauty saw like-for-like sales decline of 11% in Q1, with expectations for further improvement in Q2 [6] - The fragrance portfolio continues to be a key driver, with fragrance volumes up low single digits in Q1 [6] Market Data and Key Metrics Changes - The prestige beauty market grew 6% in Q1, while Coty's prestige sell-out grew 1% [7] - The mass beauty market grew 2% in Q1, but Coty's sell-out declined 6% [8] - In China, Coty's Q1 sell-out grew 15%, significantly outpacing the market [42] Company Strategy and Development Direction - The company aims to solidify its position as a global prestige beauty company with a focus on fragrance and scenting [4] - A strategic review is underway to transform the consumer beauty business while improving profitability and balance sheet [3] - The company is targeting significant fixed cost savings across the organization, with a goal of approximately $200 million in fiscal 2026 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in building momentum through fiscal year 2026, despite ongoing challenges [5] - The company anticipates a return to profitable sales growth in the second half of fiscal 2026, supported by new launches and alignment between sell-in and sell-out [18] - Management noted that the broader beauty market is moderating, but fragrances continue to outperform [6] Other Important Information - The company generated over $40 million in productivity savings in Q1 [11] - Recent tariff updates are expected to have a gross impact of under $50 million for the year, which is $20 million lower than previous assumptions [12] - The company is actively pursuing the monetization of VEGA to support deleveraging efforts [16] Q&A Session Summary Question: What are the expectations for sales trends in Q2? - The company expects Q2 like-for-like sales to land at the more favorable end of the prior guidance of -3% to -5% [18] Question: How is the company addressing challenges in the U.S. market? - Management highlighted new leadership and structural changes aimed at closing the gap between sell-out and sell-in in the U.S. market [9] Question: What is the outlook for EBITDA in the second half? - Positive EBITDA is expected in the second half, supported by a return to sales growth and fixed cost savings initiatives [20]

Core Insights - Coty Inc. reported a 6 percent decline in net revenue to $1.58 billion for the first three months of fiscal 2026, aligning with Wall Street estimates, while like-for-like revenues fell by 8 percent [1][2] - The company is set to lose its Gucci license for fragrance and beauty, which accounts for approximately 8 percent of its sales and 11 percent of its profits, as part of Kering's deal to sell its beauty business to L'Oréal [3][4] Financial Performance - Prestige revenue decreased by 4 percent, just exceeding $1 billion, while consumer beauty revenue fell by 9 percent to $507.7 million [2] - Adjusted earnings per share were reported at 12 cents, below analysts' expectations of 15 cents [2] Strategic Initiatives - Coty is focusing on optimizing the Gucci brand during the remaining term of its license and is exploring new partnerships with other brands [4] - The company plans to launch new fragrances under brands such as Swarovski, Etro, and Marni within the next two years, alongside innovations in prestige cosmetics like Marc Jacobs Beauty set for 2026 [5] Business Review - A strategic review is underway for Coty's $1.2 billion mass color cosmetics business and its $400 million operations in Brazil, assessing options including partnerships, divestitures, and spin-offs [5] - The consumer beauty division is the only segment currently under strategic review, with Coty denying any plans to sell its prestige division [6] Market Position - Coty's market capitalization is currently valued at $3.33 billion [7]

Sales Performance & Market Trends - Coty's Prestige revenues LFL decreased by 6%[10], while the Prestige Beauty Market grew by 6%[9] - Coty's Consumer Beauty revenues LFL decreased by 11%[10], while the Mass Beauty Market grew by 2%[10] - Coty's Ultra-Premium collections experienced a sales growth of 17%[99] in 1Q26 - Coty's e-commerce sell-out growth for Prestige was +5%[25] and for Consumer Beauty was +6%[25] in 1Q26 Financial Results & Savings - Adjusted EBITDA was approximately $296 million[37] in 1Q26, an 18% decrease[37] - Adjusted EPS was $0.15[40] in 1Q26, a 17% year-over-year decrease[40] - The company delivered over $40 million[20] of productivity savings and over $10 million[20] of fixed cost reductions in 1Q26, expecting total savings of approximately $200 million[20] in FY26 - Approximately $900 million[48] of CY26 debt was refinanced at a 5.60%[48] cost of debt Strategic Initiatives & Outlook - Coty is targeting approximately $200 million[41] in savings in FY26[41] - The company is on track to end CY25 with leverage at approximately 3.5x[43] - For 2Q26, the company anticipates continued sequential trend improvement in Prestige and Consumer Beauty, with LFL sales declining 3% to 5%[53] - Coty expects LFL revenue growth in 2H FY26[54] compared to 2H FY25[54], supporting FY26 EBITDA of approximately $1 billion[54]

Financial Performance - Coty Inc. reported financial results for the fiscal year ended June 30, 2025, with a focus on strategic planning and future revenue trends [158]. - The company reported a mid-single digit percentage net revenue decline in the fragrance category during the first three months of fiscal 2026, despite overall market growth [177]. - The company expects its reported net revenue for the second quarter of fiscal 2026 to be roughly flat compared to the prior year, with an estimated low to mid-single digit percentage benefit from foreign exchange [179]. - Net revenues for the three months ended September 30, 2025, decreased by 6%, or $94.3 million, to $1,577.2 million from $1,671.5 million in the same period of 2024, primarily due to a 10% decline in unit volume [190]. - Prestige segment net revenues decreased by 4%, or $44.6 million, to $1,069.5 million, while Consumer Beauty segment revenues decreased by 9%, or $49.7 million, to $507.7 million [191][193]. - Adjusted operating income for the total company was $240.5 million for the three months ended September 30, 2025, compared to $303.6 million in the same period of 2024 [205]. - Net income for Coty Inc. decreased to $74.0 million in Q3 2025 from $90.7 million in Q3 2024, representing an 18% decline [206]. - Adjusted net income attributable to Coty Inc. was $106.0 million, down 17% from $128.1 million in the same period last year [224]. Cost Management and Efficiency - The company anticipates ongoing cost efficiency and restructuring initiatives to enhance profitability and cash flow management [160]. - The company plans to implement a Fixed Cost Reduction Plan with expected cash costs of approximately $80.0 million, evenly split between fiscal 2026 and fiscal 2027 [171]. - The company is re-accelerating cost reduction efforts to deliver savings of approximately $80.0 million in fiscal 2026 [179]. - The company expects to incur approximately $35.0 million in costs related to tariff increases through the first quarter of fiscal 2027, with $30.0 million impacting fiscal 2026 results [232]. - Cash costs associated with the Fixed Cost Reduction Plan are expected to be approximately $80.0 million, split between fiscal 2026 and fiscal 2027, with $10.0 million incurred to date [233]. Strategic Initiatives - Coty is exploring strategic transactions, including a review of its consumer beauty business and potential divestitures related to its mass color cosmetics segment [160]. - The company is conducting a strategic review of its Consumer Beauty business, assessing alternatives such as partnerships and divestitures to maximize long-term value [170]. - Coty is focused on enhancing its digital and e-commerce capabilities to adapt to changing consumer preferences and market dynamics [161]. - The company aims to leverage its leadership in global fragrances to expand its market presence in profitable beauty categories [161]. - The company is strategically positioned to achieve sustained growth in prestige fragrances with new launches planned for fiscal 2026 and beyond [177]. Market Challenges - Coty is facing inflationary pressures and plans to implement pricing actions to mitigate increased costs [160]. - The company is navigating geopolitical risks, including the impact of the war in Ukraine and conflicts in the Middle East, on its operations and sales outlook [162]. - The Americas region experienced a mid-single digit percentage decline in net revenue during the first three months of fiscal 2026, driven by negative market trends in Brazil [181]. - The decrease in net revenues was attributed to declines in fragrances and color cosmetics across both Prestige and Consumer Beauty segments, with significant impacts from European markets [190][192]. Operational Performance - Operating income for the three months ended September 30, 2025, was $185.0 million, a decrease of 22% from $237.8 million in the same period of 2024, with an operating income margin of 11.7% compared to 14.2% [196]. - The cost of sales decreased by 3%, or $16.5 million, to $560.4 million, but the cost of sales as a percentage of net revenues increased to 35.5% from 34.5%, resulting in a gross margin decrease of approximately 100 basis points [194]. - Selling, general and administrative expenses decreased by 2%, or $14.5 million, to $793.5 million, but as a percentage of net revenues, these expenses increased to 50.3% from 48.3% [195]. - The Prestige segment's operating income decreased by 13% to $208.9 million, with an operating margin of 19.5%, down from 21.7% [200]. - The Consumer Beauty segment reported an operating loss of $7.7 million, compared to an income of $14.0 million in the prior year, with an operating loss margin of 1.5% [201]. Cash Flow and Financing - Net cash provided by operating activities was $65.2 million for the three months ended September 30, 2025, compared to $67.4 million in 2024, reflecting a decrease of $2.2 million [244]. - Net cash used in investing activities decreased by $23.5 million to $53.8 million in 2025 from $77.3 million in 2024, primarily due to lower capital expenditures [245]. - The company issued $900.0 million of 5.600% senior notes due 2031, receiving net proceeds of $888.0 million, which were used to redeem existing debt [235]. - The net amount factored under factoring facilities was $223.8 million as of September 30, 2025, compared to $211.8 million as of June 30, 2025 [242]. - The company has suspended the payment of dividends on common stock until it approaches a net debt to adjusted EBITDA target of 2x [247]. Sustainability and Social Responsibility - Coty is committed to sustainability initiatives, including progress towards achieving sustainability targets and addressing climate change concerns [162]. - The company has substantially completed the exit of its commercial activities in Russia, anticipating future net cash costs of $1.0 to $1.5 million funded by its Russian subsidiary [231].