Coty Announces First Quarter Fiscal Year 2027 Results

Q1 Profit and EPS Ahead of Guidance; Modest Sales Decline of 1%, with LFL Sales Down 2%

Top 6 Core Prestige Brands Back to Growth

Operating Cash Flow Up $65 Million YoY to $130 Million, with Free Cash Flow of $85 Million

Extended Marc Jacobs License, with 40-Year Duration, Reaffirms Coty as Beauty Partner of Choice for Luxury

NEW YORK--(BUSINESS WIRE)--Regulatory News:

Coty Inc. (NYSE: COTY) (Paris: COTY) ("Coty" or "the Company") today announced its results for the first quarter of fiscal year 2027, ended September 30, 2026.

"Our first quarter results were ahead of expectations on sales, adjusted EBITDA, and EPS, alongside a significant improvement in free cash flow, supported by the focus of Coty.Curated,” said Markus Strobel, Executive Chairman and Interim Chief Executive Officer. "Our like-for-like sales decline narrowed to 2%, broadly in line with the fourth quarter and a clear improvement from the declines of 6% and 4% in the first and second halves of fiscal 2026, reflecting improvements in key markets like the U.S., Asia Pacific, and Latin America. While our progress in the first quarter is encouraging, we have more work to do to translate green shoots into a broad-based recovery.

"Our Coty.Curated framework is beginning to deliver results. Over the past year, we have increasingly concentrated investment behind our Top 6 core Prestige brands, which represented 73% of Prestige sales in Q1. These brands moved from a 6% like-for-like decline in the first half of fiscal 2026 to 5% like-for-like growth in the first quarter, with five of the six growing and combined sell-out returning to growth. Our first half launches, including BOSS Bottled Beyond for Her, Burberry Goddess Amber Vanilla, Mood Stones by Kylie Jenner, and Marc Jacobs Beauty makeup, are resonating with consumers and tracking ahead of plan.

"I am proud that we have extended the Marc Jacobs license, securing a 40-year license duration for the brand. Since our partnership began in 2003, Coty has built multiple iconic fragrances, with Marc Jacobs fragrances now ranking among the Top 10 to 15 prestige female fragrances across the U.S., U.K., Canada, and Australia. The recent launch of Marc Jacobs Beauty makeup is also off to a strong start across these markets. The multi-decade agreement provides Coty with a strong platform to build on that momentum while enhancing the long-term visibility of Coty’s Prestige portfolio. This extension is also a powerful testament to Coty’s position as a partner of choice for the world’s leading luxury fashion and lifestyle brands.

"In Consumer Beauty, the like-for-like decline narrowed to 3% from 8% in the first half of fiscal 2026. CoverGirl and Sally Hansen in the U.S. and Rimmel in the U.K. are narrowing their retail sales gap to their categories. Sally Hansen regained the number-one position among U.S. mass nail brands in the overall nail category.

"The prestige and mass beauty markets continue to grow despite macroeconomic uncertainty, while our overall sell-out still trails the market in both divisions. Our priority is to translate investment into stronger sell-out and market share gains, with market share embedded in how we reward performance across the organization.

"We remain committed to completing the strategic review by the end of calendar 2026. Alongside it, we are designing the organization and cost structure to improve execution and prioritize reinvestment behind our brands. We will continue to build on our strengths: a portfolio of leading brands, strong category positions, and a differentiated end-to-end global platform. As we’ve previously shared, FY27 will be a transition year. We expect the recovery to be uneven, and implementation will take time. We know confidence is earned through consistent delivery, and our goal is to steadily improve execution and translate it into shareholder value in the years ahead."

Soraya Benchikh, Chief Financial Officer, said, "I joined Coty at a pivotal moment, with clear priorities to deliver quality growth, improve productivity to fund disciplined reinvestment, and strengthen cash generation and conversion. The first quarter shows encouraging early progress on each, although sustainable improvement will take time. We delivered adjusted EBITDA ahead of our guidance, supported by better-than-expected sales and cost control, while continuing to invest in our brands. The year-over-year decline in adjusted EBITDA moderated to 7% from steeper declines in fiscal 2026.

"On cash, better payables and receivables performance helped improve free cash flow to $85 million. Our free cash flow, together with the initial $250 million of Gucci Beauty proceeds, reduced net debt by over $300 million since June.

"Our objective is to create value over time through a virtuous cycle: focused investment drives quality growth, while better gross margins and a more efficient cost base strengthen earnings. Converting those earnings into cash supports deleveraging and reinvestment in the next phase of sustainable growth. This is the model we are focused on executing with discipline and accountability, quarter after quarter."

*Top 6 Core Prestige Brands include Hugo Boss, Burberry, Calvin Klein, Marc Jacobs, Chloé, and Kylie Cosmetics. Top 4 Core Consumer Beauty Brands include CoverGirl, Rimmel, Sally Hansen, and adidas.

Three Months Ended September 30, 2026, Summary Results

For the three months ended September 30, 2026, compared to the three months ended September 30, 2025:

• Net revenue of $1,555.2 million decreased 1% on a reported basis. On a like-for-like (LFL) basis, net revenue declined 2%.
• Prestige net revenue of $1,058.4 million, representing 68% of the Company's total sales, declined 1% on a reported and LFL basis.
• Consumer Beauty net revenue of $496.8 million, representing 32% of the Company's total sales, decreased 2% on a reported basis and 3% on a LFL basis.
• Reported and adjusted gross margin of 63.3% decreased 120 basis points year-over-year. The decline reflected pressure from higher freight and material costs related to the Middle East conflict, alongside higher excess and obsolescence reflecting elevated demand forecasts.
• Reported operating income of $170.4 million declined from $185.0 million in the prior year. Reported operating margin of 11.0% compared to 11.7% in the prior year. Adjusted operating income of $220.5 million declined from $240.5 million in the prior year, reflecting lower sales and gross profit. Adjusted operating margin of 14.2% contracted by 100 basis points year-over-year.
• Reported net income of $106.2 million increased from $64.6 million in the prior year. Reported net income margin of 6.8% compared to 4.1% in the prior year. Adjusted net income of $146.1 million improved from $106.0 million in the prior year. Adjusted net income margin of 9.4% improved from 6.7% in the prior year. Reported and adjusted net income included a $14.8 million benefit from the mark-to-market on the equity swap, compared with a $26.5 million negative impact from the mark-to-market on the equity swap in the prior-year quarter.
• Adjusted EBITDA of $274.2 million decreased 7% from $296.1 million. Adjusted EBITDA margin of 17.6% decreased by 120 basis points.
• Reported earnings per share of $0.12 compared with $0.07 in the prior year. Adjusted earnings per share of $0.16 compared with $0.12 in the prior year. Adjusted earnings per share included a $0.01 benefit from the mark-to-market on the equity swap, compared with a $0.03 negative impact from the mark-to-market on the equity swap in the prior-year quarter.
• Cash flow from operating activities was $130.4 million, compared with $65.2 million in the prior-year period. Free cash flow was $84.6 million, compared with $11.2 million in the prior-year period.
• Total debt of $2,787.0 million on September 30, 2026, decreased from $3,088.2 million as of June 30, 2026. This resulted in a total debt to net income ratio of 5.1x. Financial net debt of $2,576.4 million decreased from $2,912.1 million on June 30, 2026. This resulted in a financial leverage ratio (net debt to adjusted EBITDA) of 3.1x.

Noteworthy Developments:

• Coty continues to implement its Coty.Curated framework to support sharper focus and stronger execution across the portfolio.
• Coty’s Prestige strategy is anchored in its Top 6 core Prestige brands, Burberry, Hugo Boss, Calvin Klein, Marc Jacobs, Chloé, and Kylie Cosmetics, which collectively returned to growth in Q1, up 5%. Key launches continued to perform well, including BOSS Bottled Beyond for Her, Mood Stones by Kylie Jenner, and Marc Jacobs makeup, which contributed approximately 2% of the growth in these Top 6 core brands.
• Coty extended the Marc Jacobs license, securing a 40-year license duration for the brand and building on a partnership that began in 2003. The agreement reinforces Coty’s position as a partner of choice for the world’s leading luxury fashion brands and increases the long-term visibility of its Prestige portfolio.
• Coty sharpened investment behind its four core Consumer Beauty brands, CoverGirl, Rimmel, Sally Hansen, and adidas. In the U.S., CoverGirl continued to narrow its category gap in both value and units, while Sally Hansen outperformed the category in units and regained its position as the #1 mass nail brand.
• Coty released its Fiscal Year 2026 (FY26) Sustainability Report under its Beauty That Lasts strategy on October 21, 2026. The report details advances across focus areas, including validation of Coty’s Net Zero 2050 target, achieving its water withdrawal reduction target, decreasing virgin plastic use, and investment in employees’ digital and leadership skills.

Pipeline for FY27 and Beyond:

Prestige Plans

• Building on the fully incremental launch of BOSS Bottled Beyond for Her to grow Hugo Boss’s female fragrance business, while focusing investment on the brand’s core franchises
• Amplifying Burberry’s fragrance and makeup momentum with higher marketing investment to deepen consumer engagement, while strengthening the brand’s presence in ultra-premium fragrance with the Prorsum collection’s launch at select retailers. Burberry’s Goddess Amber Vanilla fragrance extension is already a Top 5 female launch and performing ahead of expectations, supported by its distinctive packaging and ingredient profile
• Building Marc Jacobs Beauty into a multi-category brand with the successful launch of Marc Jacobs Beauty makeup online and in hundreds of Sephora stores across the U.S., U.K., Australia, and Canada with retail sales exceeding targets, while simultaneously driving a halo on the core fragrance business
• Fueling continued growth in Kylie Cosmetics’ makeup and fragrance sales through the strong incremental launch of the Mood Stones by Kylie Jenner fragrance collection and new lip kits, resulting in double-digit brand LFL sales growth in Q1
• Advancing additional launches and strengthening the base business across multiple brands including Calvin Klein, Chloé, and Davidoff, alongside the planned debut of Etro fragrances in the second half and Swarovski fragrances in CY27

Consumer Beauty Plans

• Focusing Color the Future on fewer, higher-impact launches, including CoverGirl's Clean Fresh Yummy Big Oil Stick, Rimmel's Oh My Gloss! Slip Stick, Max Factor's Lasting Blur, and seasonal shade stories from Sally Hansen's Miracle Gel and INSTA-DRI
• Implementing Future of Scenting to sharpen focus across the mass fragrance portfolio and drive more consistent performance, with continued scaling of adidas fragrances globally

Outlook

Consumer demand for beauty remains resilient, with more moderate but continued growth in fragrances and cosmetics. Coty continues to advance its Coty.Curated strategic framework, focusing on core brands and markets, reducing portfolio complexity, increasing agility through organizational simplification, and identifying savings opportunities across the P&L to support increased investment in consumer engagement while also strengthening profitability.

Coty expects 2Q27 LFL revenue to decline by a low-single-digit percentage, broadly consistent with the last two quarters. As part of this outlook, the Company anticipates continued LFL sales growth in its Top 6 core Prestige brands. On a reported basis, Coty expects a low-single-digit percentage headwind to Q2 revenues from foreign exchange (FX).

Coty anticipates Q2 adjusted EBITDA to decline by a high-single-digit percentage, consistent with the trends in Q1. This is expected to result in adjusted EPS, excluding the equity swap, of $0.16 to $0.18 per share.

Supported by the seasonally strong business dynamics in the first half, as well as continued disciplined capital expenditure and working capital management, Coty continues to expect free cash flow for the first half of FY27 of over $300 million.

FY27 is expected to be a transition year as Coty completes its strategic review and advances the early-stage implementation of Coty.Curated. Accordingly, at this stage Coty is providing guidance for Q2. Following the expected completion of the Company's strategic review by the end of CY26, Coty expects to provide a broader outlook supported by greater visibility into Coty's growth and profitability trajectory.

Prestige

• Reported net revenues in the first quarter decreased by $11.1 million year-over-year primarily driven by a moderate decline in Prestige fragrance and skin care, partially offset by growth in Prestige cosmetics.
• Reported operating income increased in the first quarter, primarily due to lower advertising and consumer promotional costs, largely offset by lower gross margin.

Consumer Beauty

• Reported net revenues in the first quarter decreased by $10.9 million year-over-year primarily driven by a decrease in color cosmetics and mass fragrance sales, partially offset by growth in mass body care.
• Reported operating loss in the first quarter worsened, driven by lower gross margin and higher SG&A.

Americas

• Reported net revenues in the first quarter increased by $3.4 million year-over-year primarily driven by higher sales in Brazil.

EMEA

• Reported net revenues in the first quarter decreased by $44.8 million year-over-year primarily driven by lower sales in the Middle East and Europe, partially offset by higher sales in Africa.

Asia Pacific

• Reported net revenues in the first quarter increased by $19.4 million year-over-year primarily driven by higher sales in China, Southeast Asia, and the Asia Travel Retail channel.

Conference Call

Coty Inc. will issue pre-recorded remarks on November 4, 2026 at approximately 4:45 PM (ET) / 10:45 PM (CET) and will hold a live question and answer session on November 5, 2026 beginning at 9:30 AM (ET) / 3:30 PM (CET). The pre-recorded remarks and live question and answer session will be available at http://investors.coty.com. The dial-in number for the live question and answer session is 1-800-274-8461 in the U.S. or 1-203-518-9814 internationally (conference passcode number: COTY1Q27).

About Coty Inc.

Founded in Paris in 1904, Coty is one of the world’s largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care. Coty serves consumers around the world, selling prestige and mass market products in over 120 countries and territories. Coty and our brands empower people to express themselves freely, creating their own visions of beauty; and we are committed to protecting the planet. Learn more at coty.com or on LinkedIn and Instagram.

Forward Looking Statements

Certain statements in this Earnings Release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company's current views with respect to, among other things, strategic planning, targets and outlook for future reporting periods (including the extent and timing of revenue, expense and profit trends and changes in operating cash flows and cash flows from operating activities and investing activities, as well as the Company’s expectations for the impact of the exit from the Gucci Beauty license), the Company’s future operations and strategy (including the ongoing refinement and implementation and related impact of its global business strategies), the Company's plans to evaluate its central organization, manufacturing and asset base, and certain market structures to adjust its scope and size for future business, the Company's ongoing and future cost efficiency, optimization and restructuring initiatives and programs, (including plans to develop a significant fixed-cost savings plan in connection with the exit from the Gucci Beauty license), the ongoing strategic review of the Company’s consumer beauty business, including its mass color cosmetics business and associated brands and the Company’s distinct Brazil business comprised of local Brazilian brands, the timing and outcome of such strategic review and any transactions related thereto, use of proceeds from any such transactions, expectations and/or plans with respect to joint ventures, the timing and size of any future distribution related to the Wella distribution rights, the Company’s capital allocation strategy and payment of dividends (including suspension of dividend payments and the duration thereof and any plans to resume cash dividends on common stock or to continue to pay dividends in cash on preferred stock) and expectations for stock repurchases or investments, plans and expectations with respect to licenses and/or portfolio changes, product launches, relaunches or rebranding (including the expected timing or impact thereof), plans for strengthening presence in certain categories, markets and channels, expectations for the impact, costs, timing and outcome of any future divestitures, expectations for synergies, savings, performance, cost, timing and integration of any future acquisitions, expectations for future cash flows, liquidity and borrowing capacity (including any refinancing or deleveraging activities), timing and size of cash outflows and debt deleveraging, the timing and magnitude of any "true-up" payments in connection with the Company’s forward repurchase contracts and plans for the settlement of such contracts, the timing and extent of any future impairments, and synergies, savings, impact, cost and timing of the Company's ongoing refinement and implementation of its global business strategies (including operational and organizational structure changes, operational execution and simplification initiatives, fixed cost reduction plans, continued process improvements and supply chain changes), the expected impact of geopolitical risks including the ongoing war in Ukraine and/or the war in the Middle East on its business operations, sales outlook and strategy, expectations regarding the impact of tariffs (including magnitude, scope and timing) and plans to manage such impact, expectations of the impact of inflationary pressures and the timing, magnitude and impact of pricing actions to offset inflationary costs, the expected impact of global supply chain challenges and/or inflationary pressures (including as a result of the war in Ukraine and/or the war in the Middle East (including the expected impacted of elevated Brent crude oil prices), or due to a change in tariffs or trade policy impacting raw materials, expectations regarding future service levels, inventory levels and excess and obsolescence trends (including as a result of the Coty.Curated framework), the expected impact, cost, timing and implementation of e-commerce and digital initiatives, expectations regarding the expanded use of artificial intelligence ("AI") and advanced analytics in the Company's operations and the timing and impact thereof, the expected impact, cost, timing and implementation of sustainability initiatives (including progress, plans, goals and its ability to achieve sustainability targets), and the priorities of senior management. These forward-looking statements are generally identified by words or phrases, such as “anticipate”, “are going to”, “estimate”, “plan”, “project”, “expect”, “believe”, “intend”, “foresee”, “forecast”, “will”, “may”, “should”, “outlook”, “continue”, “temporary”, “target”, “aim”, “potential”, “goal” and similar words or phrases. These statements are based on certain assumptions and estimates that the Company considers reasonable, but are subject to a number of risks and uncertainties, many of which are beyond its control, which could cause actual events or results (including its financial condition, results of operations, cash flows and prospects) to differ materially from such statements, including risks and uncertainties relating to:

• the Company’s ability to successfully implement its strategic priorities (including leveraging its leadership position and capabilities in global fragrances to fuel strong expansion and strengthen its presence in a limited number of struct

For more information:
Investor Relations
Olga Levinzon, +1 212 389-7733
olga_levinzon@cotyinc.com

Media
Antonia Werther, +31 621 394495
antonia_werther@cotyinc.com