Coty (COTY) Q3 2026 [Q&A] earnings summary

Executive summary

• Q3 FY26 profit exceeded expectations despite revenue declines and a $362.8M impairment in Consumer Beauty, driven by cost control and investment reallocation to Q4.

• The Coty.Curated framework is being implemented to sharpen priorities, focus investments, and improve execution for FY27 and beyond.

• Prestige brands remain a core strength, with ongoing launches and market share gains in key markets, while Consumer Beauty improved in the U.S. but lagged in Europe.

• Q3 net revenues were $1,281.6M, down 1% reported and 7% LFL year-over-year, with a 1.4% negative impact from the Middle East.

• Operating loss widened to $372.0M, primarily due to higher asset impairment charges and increased cost of goods sold.

Financial highlights

• Q3 adjusted EBITDA was $127.0M (down 38% YoY); nine-month adjusted EBITDA was $753.3M (down 21%).

• Q3 gross margin was 61.8% (down 230 bps YoY), pressured by excess and obsolescence costs, higher manufacturing, and increased promotions.

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

• Free cash flow for nine months was $275.6M, up 14% YoY.

• Asset impairment charges totaled $362.8M, mainly in Consumer Beauty.

Outlook and guidance

• Q4 FY26 LFL revenue expected to decline mid-single digits, with sequential improvement from Q3.

• FY26 adjusted EBITDA guidance is $838M–$848M; adjusted EPS (excl. equity swap) expected at $0.33–$0.35.

• Q4 adjusted EBITDA expected at $85M–$95M; adjusted EPS (excl. equity swap) breakeven to a loss of $0.02.

• Middle East headwinds and COGS pressures expected to persist into Q4 and FY27.

• Cost reduction efforts re-accelerated, targeting $80M in FY26 and >$330M by FY27.