Coty (COTY) Q3 2026 Prepared Remarks earnings summary

Executive summary

• Q3 FY26 like-for-like sales declined 5.5%–7%, mainly due to Middle East conflict, with prestige segment slightly positive in sell-out but reported sales down, and Consumer Beauty under pressure despite U.S. brands outperforming European peers.

• Net revenues for Q3 were $1,281.6M, down 1% reported and 7% LFL year-over-year, with operating loss widening to $372.0M due to higher impairment charges and cost of goods sold.

• Net loss attributable to common stockholders was $411.4M, or $(0.47) per share, with adjusted operating income at $72.4M and adjusted EBITDA at $127.0M, both down sharply year-over-year.

• Strategic focus is shifting to fewer, higher-impact initiatives, cost discipline, and operational simplification under the Coty.Curated framework.

• Operating cash flow for the fiscal year to date rose to $422M and free cash flow to $276M, even as profit declined.

Financial highlights

• Adjusted gross margin was 61.8% in Q3, down 230–250 basis points year-over-year, mainly due to supply chain under-absorption and increased excess/obsolescence.

• Adjusted EBITDA for Q3 was $127M (down 38% YoY); nine-month adjusted EBITDA was $753M (down 21% YoY).

• Adjusted EPS for Q3 was $0.02 (excluding equity swap); 9M26 was $0.35.

• Consumer Beauty reported a $363 million impairment charge due to lower forecasted revenues and higher cost of capital.

• Free cash flow year-to-date was $276M, up 14% year-over-year.

Outlook and guidance

• Q4 like-for-like revenues expected to decline by a mid-single digit percentage, with ongoing Middle East headwinds reducing sales by 2%-3%.

• Q4 adjusted EBITDA expected at $85M–$95M; adjusted EPS breakeven to a loss of $0.02 per share.

• Fiscal 2026 adjusted EBITDA guidance is $838M–$848M; adjusted EPS (excluding equity swap) is $0.33–$0.35.

• Free cash flow in Q4 expected to be neutral to moderately positive.

• Fiscal 2027 planning includes incremental launches focused on core franchises, cost headwinds from the Middle East conflict, and further fixed cost savings.