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 company expects full-year EBITDA to be above $1 billion, despite headwinds from tariffs impacting gross margins [11][72] - The major gap in EBITDA for the full year is driven by tariffs, which if excluded, would result in slightly negative EBITDA [11][70] - Free cash flow is projected to grow in fiscal 2026 [12] Business Line Data and Key Metrics Changes - The prestige fragrance category remains healthy, with low to mid-single-digit growth, while mass fragrance is also performing well [7][21] - The skincare category outperformed the market by 11%, driven mainly by e-commerce, with Lancaster growing significantly in China [27][26] - The mass fragrance category accounts for approximately 7% of net revenues and is experiencing growth due to the Treatonomics phenomenon [20][21] Market Data and Key Metrics Changes - The Asian travel retail market is still heavily affected, but the beauty market in China is gradually improving, with prestige beauty showing positive growth [51] - The U.S. market is experiencing increased promotional activities, particularly in consumer beauty and color cosmetics [29][41] Company Strategy and Development Direction - The company is focusing on increasing profitability in the color cosmetics category while managing promotional activities cautiously [17][29] - There is a strategic emphasis on innovation, particularly in the fragrance category, with significant launches planned for the second half of the year [13][14] - The company aims to make travel retail a discovery channel for new products, enhancing exclusivity and consumer attraction [49][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current macroeconomic challenges but expresses confidence in returning to growth in the second half of fiscal 2026 [10][72] - The company is committed to divesting its stake in Velar and is actively contemplating options for this divestiture [62][102] - Management believes that the fragrance market will continue to grow, driven by consumer trends and the importance of scenting in daily life [39][40] Other Important Information - The company is implementing a new forecasting tool to improve inventory management and cash flow [81] - The management is focused on cash deleveraging as a top priority, with plans to refinance certain debts in 2026 [80][82] Q&A Session Summary Question: Can you provide more detail on the second half outlook? - Management expects sequential improvement in Q1 and Q2, with a return to growth in H2 as retailer inventory headwinds ease [6][10] Question: How is the company addressing the higher promotional environment? - The company is managing promotional activities cautiously and focusing on strategic revenue management to protect brand integrity [29][30] Question: What is the outlook for travel retail? - Travel retail is being positioned as a discovery channel, with exclusive product launches planned to attract consumers [49][50] Question: Are there any pullbacks in specific demographics for prestige fragrances? - Management reports no pullbacks in key demographics, with continued growth among Gen Z and Hispanic consumers [96][98] Question: What are the refinancing expectations around the 2026 maturity? - The refinancing will be consistent with the current secured structure, and the company is actively working on this [101][102]