Core Insights - Coty is entering a "fresh chapter" under interim CEO Markus Strobel, focusing on realism, discipline, and improved execution after recent performance has not met expectations [4] - The company aims to restore sell-out momentum and tighten operational discipline, particularly in the Consumer Beauty segment [4] Group 1: Strategic Initiatives - Coty plans to rebalance spending towards consumer-facing working media, such as digital and influencer marketing, by freeing up funds from asset creation [1] - The company will streamline innovation bundles for fiscal 2026, focusing on fewer SKUs to avoid crowding out productive items and reduce trade returns [2] - A focus on "iconic assets" within key brands like COVERGIRL and Rimmel is expected to moderate declines in sales from "high single digits" to "low single digits" or "mid-single digits" [3] Group 2: Financial Performance - Q2 results showed a ~3% decline in like-for-like sales, with adjusted EBITDA down 15% to $330 million and a gross margin decrease of 260 basis points [6] - Management has withdrawn full fiscal 2026 guidance but provided Q3 targets of mid-single-digit like-for-like decline and $100–110 million EBITDA [6] Group 3: Operational Changes - The company is implementing a $750 million upfront divestiture of Wella and targeting ~$200 million in savings for FY26, alongside accelerated AI initiatives that could reduce digital asset post-production costs by 70–90% [5] - Management is focusing on improving operational discipline and platforming across brands, with expectations for margin improvement beginning in fiscal 2027 [9][10] Group 4: Market Strategy - Coty is investing in e-commerce and new channels like TikTok Shop while maintaining legacy channels, responding to shifts in consumer behavior [11] - Sales on Amazon have grown by over 30% in the last six months, with the launch of Marc Jacobs on Amazon contributing to double-digit growth [12] Group 5: Future Outlook - The company anticipates a mid-single-digit sales decline in fiscal Q3 due to Consumer Beauty headwinds and prior innovation complexity [16] - Management expects gross margin pressures to continue in Q3 but anticipates recovery in Q4 and ongoing improvements into fiscal 2027 [19]