Coty (COTY) Q4 2026 (Q&A) earnings summary

Executive summary

• Leadership emphasized improvements in Q4 FY26, with sequential like-for-like sales growth and a clear framework to strengthen execution and close the gap to market.

• Achieved FY26 adjusted EBITDA of $847M and free cash flow of $348M, despite challenging market conditions and a significant decline in adjusted EPS year-over-year.

• Strategic actions included rightsizing commercial and R&D functions, monetizing the Wella stake for $750M, and agreeing to sell the Gucci Beauty license to Kering for $400M plus inventory proceeds.

• The Coty.Curated framework is in execution, focusing on core brands, cost control, and portfolio simplification.

• Strategic review of the Consumer Beauty business is ongoing, with an aspiration to complete by the end of calendar 2026.

Financial highlights

• FY26 net revenues were $5,806.6M (-2% reported, -5% LFL); Q4 net revenues were $1,269.2M (+1% reported, -1% LFL).

• FY26 adjusted EBITDA was $847M, a 22% decrease year-over-year; adjusted EPS (excluding equity swap) was $0.34, down 32%.

• FY26 adjusted gross margin was 62.3%, down 140 bps from FY25.

• FY26 operating cash flow rose to $538M and free cash flow to $348M, up $70M year-over-year.

• Net debt at Q4 end was ~$2.9B, reduced by $839M year-over-year; leverage at 3.4x.

Outlook and guidance

• Q1 FY27 LFL revenue expected to decline low- to mid-single digits; adjusted EBITDA to decline low teens percent year-over-year.

• FY27 is a transition year, with sequential improvement expected after Q1 and upside potential tied to faster sell-out and market share gains.

• Free cash flow for 1H FY27 expected to exceed $300M.

• Long-term plan aims to moderate FY28 profit impact from Gucci exit and resume profit growth in FY29 and beyond.

• The company aims to return the underlying portfolio (excluding Gucci) to growth in FY 2028, focusing on incremental innovation and portfolio strength.