Coty (NYSE:COTY) Posts Quarterly Earnings Results, Beats Estimates By $0.04 EPS

Coty (NYSE:COTY) posted its quarterly earnings results on Wednesday. The company reported $0.16 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.12 by $0.04, FiscalAI reports. Coty had a positive return on equity of 7.05% and a negative net margin of 9.74%. The business had revenue of $1.56 billion during the quarter, compared to analyst estimates of $1.53 billion. During the same period in the prior year, the business earned $0.12 earnings per share. The business’s revenue was down 1.4% compared to the same quarter last year.

Here are the key takeaways from Coty’s conference call:

• Coty’s first-quarter results beat expectations: like-for-like revenue declined 1.6%, a smaller drop than the company had guided, and adjusted EBITDA was $274 million. Management cautioned that fiscal 2027 remains a transition year and recovery may not be linear.
• Coty continued to trail its markets in sell-out: Prestige declined 2% against 3% market growth, while Consumer Beauty fell 3% as its market grew 5%. The top six Prestige brands returned to sell-out growth, but management said more improvement is needed to lift division-wide performance.
• Adjusted EBITDA fell 7% year over year, and gross margin declined 120 basis points to 63.3%, pressured by higher freight and material costs, excess and obsolete inventory, and unfavorable mix. Coty expects a high-single-digit EBITDA decline in Q2 and said elevated Middle East-related costs may persist through the rest of fiscal 2027.
• Free cash flow rose $73 million year over year to $85 million, and net debt fell about $300 million from June to approximately $2.6 billion, or 3.1 times leverage. The company attributed the debt reduction partly to cash flow and $250 million in proceeds related to the Gucci transition; it expects more than $300 million of free cash flow in the first half.
• More concentrated investment showed early traction: Coty’s six core Prestige brands grew 5% in the quarter, with five of the six growing, and launches including Marc Jacobs Beauty were tracking ahead of plan. Management expects continued growth from the core six in Q2, but at a more moderate pace, and remains committed to completing its strategic review by the end of 2026.

Coty Trading Up 4.0%

Shares of COTY traded up $0.15 during trading on Friday, reaching $4.07. 5,551,147 shares of the company traded hands, compared to its average volume of 8,719,854. The stock has a 50-day simple moving average of $2.92 and a 200-day simple moving average of $2.55. The stock has a market cap of $3.58 billion, a PE ratio of -6.28, a price-to-earnings-growth ratio of 0.67 and a beta of 0.83. Coty has a twelve month low of $1.82 and a twelve month high of $4.09. The company has a quick ratio of 0.42, a current ratio of 0.75 and a debt-to-equity ratio of 0.96.

Analyst Ratings Changes

Several analysts have issued reports on the company. Morgan Stanley upped their target price on Coty from $2.50 to $2.75 and gave the company an “equal weight” rating in a report on Tuesday, August 25th. TD Cowen initiated coverage on Coty in a report on Friday, October 30th. They set a “hold” rating on the stock. Weiss Ratings lowered Coty from a “sell (d-)” rating to a “sell (e+)” rating in a report on Friday, October 30th. Deutsche Bank Aktiengesellschaft reissued a “hold” rating and set a $3.00 price target on shares of Coty in a research report on Friday, August 21st. Finally, The Goldman Sachs Group reissued a “neutral” rating and issued a $2.60 price objective on shares of Coty in a report on Thursday, August 20th. One research analyst has rated the stock with a Buy rating, nine have assigned a Hold rating and three have assigned a Sell rating to the stock. According to MarketBeat.com, Coty currently has an average rating of “Reduce” and a consensus price target of $3.25.

Key Coty News

Here are the key news stories impacting Coty this week:

• Positive Sentiment: Results beat expectations. Coty reported $0.16 per share versus the $0.12 consensus, while revenue of $1.56 billion topped estimates of $1.53 billion. The company also cited stronger free cash flow. Read More.
• Positive Sentiment: Prestige brands showed signs of recovery. Core prestige returned to growth, narrowing Coty’s overall sales decline and offering investors evidence that its business transition may be progressing. Read More.
• Neutral Sentiment: Longer-term strategic developments remain in view. Coty expects to complete its strategic review by the end of 2026; coverage also reported a $400 million Gucci-related deal. Read More.
• Negative Sentiment: Operating headwinds persist. Revenue declined 1.4% year over year, and margins weakened. Coty also forecast a soft second quarter as higher costs weigh on its turnaround, raising concerns about near-term profitability. Read More.
• Negative Sentiment: RBC’s price target remains below the recent trading level. The bank raised its target from $3.00 to $3.50 but kept a “sector perform” rating, signaling limited upside at the target. Read More.

About Coty

Coty Inc is a global beauty company that develops, manufactures and markets fragrances, cosmetics, skin care and body-care products. Its portfolio includes luxury, prestige and mass-market brands, with products sold through department stores, specialty retailers, e-commerce platforms and other distribution channels.

The company’s brands have included CoverGirl, Rimmel London, Max Factor, Bourjois, Gucci Beauty, Calvin Klein, Marc Jacobs, Burberry, Hugo Boss and Chloé, among others. Coty also participates in professional beauty through hair-care and salon brands, including the Wella portfolio.

Founded in Paris in 1904 by François Coty, the company built its early reputation in fragrance before expanding into broader beauty categories and international markets.