Coty Q4 Results Show Cash Gains, Flag FY27 Transition

Coty Inc. (NYSE: COTY) reported fourth-quarter fiscal 2026 results on Aug. 19, 2026. The Coty Q4 results showed stabilizing sales and improved cash flow despite a wider net loss. Management described fiscal 2027 as a transition year amid a strategic portfolio review and issued cautious first-quarter guidance.

Quarter Results and Profitability

For the quarter ended June 30, 2026, Coty reported net revenues of approximately $1.3 billion, up 1% year over year on a reported basis, supported by a 3% foreign-exchange tailwind. Like-for-like sales declined about 1%, an improvement from earlier quarters and better than management’s prior expectation of a mid-single-digit decline. The company described this as a return to reported sales growth and a convergence of sales and sell-out.

Reported and adjusted gross margins both stood at 60.9%, down 140 basis points year over year. The decline reflected lower cost absorption due to reduced shipment volumes, elevated excess and obsolescence charges, and tariffs. Coty posted a reported operating loss for the quarter, reversing operating income from the prior year. Adjusted operating income fell to about $40 million from roughly $68 million a year earlier, while adjusted EBITDA declined about 26% to approximately $94 million.

The company reported a wider net loss near $144 million, with diluted reported earnings per share (EPS) of −$0.16. On an adjusted basis, the loss per share narrowed to −$0.02, missing consensus estimates by roughly $0.01.

Cash flow improved significantly. Operating cash flow rose to $116 million from $83 million a year earlier, and free cash flow increased to $73 million from $35 million. For the full fiscal year, Coty generated operating cash flow of about $538 million and free cash flow near $348 million, which the company highlighted despite weaker profitability.

Full-year net revenues declined 2–3% on a reported basis to about $5.8 billion and fell roughly 5% on a like-for-like basis. The company’s full-year net loss ranged between $605 million and $618 million, with diluted reported EPS near −$0.70 per share.

Transition-Year Strategy and Guidance

Coty is advancing its Coty.Curated simplification program to focus on core brands and divest non-core assets, with a strategic review centered on the Consumer Beauty division. Management characterized fiscal 2027 as a transition year linked to this review and decisions on major brand licenses. Secondary reports have identified brands such as CoverGirl and Rimmel as possible disposal candidates.

The company expects to complete the strategic review by the end of calendar 2026. Under an amended agreement, Coty will continue operating the Gucci Beauty brand through at least June 30, 2027, ending the license about one year earlier than originally scheduled. These timelines will influence the timing and mix of disposals and the pace of restructuring in fiscal 2027.

For the first quarter of fiscal 2027, Coty guided for like-for-like revenue to decline by a low- to mid-single-digit percentage. Adjusted EPS is expected between $0.11 and $0.13. Management anticipates adjusted EBITDA to fall by a low-teens percentage year over year, though this would represent a sequential improvement compared with the second half of fiscal 2026. Adjusted gross margin is forecast to decline by roughly 50 to 100 basis points year over year.

The company expects free cash flow for the first half of fiscal 2027 to exceed $300 million, supported by working-capital management and cost discipline. Coty is withholding full-year fiscal 2027 guidance due to the early stage of Coty.Curated implementation and the ongoing strategic review.

Coty appointed Soraya Benchikh, formerly finance chief at British American Tobacco, as chief financial officer effective with the Q4 release. Her role will focus on leading cost control and cash-generation efforts tied to the simplification plan.