Core Insights - Coty reported a decline in both net sales and earnings for Q1 fiscal 2026, missing consensus estimates [2][4] - The company is focusing on becoming a Prestige-focused beauty player, particularly in fragrances, and expects gradual improvement in sales trends [3][20] Financial Performance - Adjusted earnings were 12 cents per share, below the expected 15 cents, and down from 15 cents in the previous year [4] - Net revenues were $1,577.2 million, a 6% year-over-year decline, missing the consensus estimate of $1,583 million [5] - Adjusted operating income fell to $240.5 million, a 21% decline from the prior year, with an adjusted operating margin of 15.2% [6] Segment Analysis - Prestige segment revenues were $1,069.5 million, accounting for 68% of total sales, down 4% year-over-year [8] - Consumer Beauty segment revenues were $507.7 million, a 9% decline, with an operating loss of $7.7 million compared to an operating income of $14 million in the prior year [12][13] Regional Performance - Americas segment revenues were $649.6 million, reflecting a 6% decline [16] - EMEA segment revenues were $754.8 million, a 4% decline, while Asia Pacific revenues were $172.8 million, down 9% [17][18] Future Outlook - Management anticipates improved sales trends in fiscal 2026, with a return to LFL revenue growth expected in the second half of the fiscal year [21][22] - Adjusted EBITDA is projected to decline in the fiscal second quarter before returning to growth later in the year, targeting approximately $1 billion in adjusted EBITDA for fiscal 2026 [23] Market Position - Coty has a subpar Growth Score of D and a Momentum Score of F, but a value score of B, placing it in the top 40% for value investment strategy [25] - The stock has a Zacks Rank 3 (Hold), indicating an expected in-line return in the coming months [26]