On August 19, international perfume and beauty group COTY (NYSE: COTY; Paris: COTY) announced its fourth quarter and full year results for the fiscal year 2026 ended June 30, 2026. Data:

Sales, profit and cash flow performance in the fourth quarter and full fiscal year exceeded expectations. Net revenue in the fourth quarter increased 1% year-on-year to US$1.2692 billion, while comparable sales (LFL) fell 1% year-on-year. For the full year, net revenue fell 2% year-on-year to US$5.8066 billion, and comparable sales fell 5% year-on-year.

Markus Strobel, executive chairman and interim CEO of Coty, said: "We ended fiscal 2026 on a stronger footing, with sales and profits exceeding targets. We are satisfied with the resumption of growth in sales in the fourth quarter (as reported), with sales up 1% year-on-year. Comparable sales continued to improve, with the decline narrowing to 1%. Among them, the Middle East conflict had a negative impact on comparable sales of approximately 1%. Even in the face of business headwinds, free cash flow continues to grow.

At the same time, sell-in and sell-out are gradually converging, which is encouraging. However, the actual sales performance of the two major business units is still not as good as the market. We are not satisfied with this. Steadily narrowing the gap with the market will still be the company's top priority."

As of the close of the earnings report day, Coty's share price on the New York Stock Exchange rose 10.58% from the previous trading day to US$3.03/share, and its share price has fallen by about 39% in the past year. The latest market value is approximately US$2.67 billion.

Coty's "Coty.Curated Strategic Framework" has entered the implementation stage, improving organizational agility and strengthening responsibility implementation by streamlining commercial organizations, mass beauty research and development and global brand marketing functions. At the same time, clear market share targets will be incorporated into the global incentive mechanism.

In December 2025, Coty realized his remaining stake in Wella for US$750 million. In July 2026, Coty agreed to end the cooperation with Kering's Gucci beauty licensing business about one year in advance, and will receive approximately US$400 million in compensation. At the same time, he will sell sufficient Gucci beauty inventory to Kering Group to ensure a smooth handover of business.

Markus Strobel said: "Exiting Gucci's beauty licensing business will cause a phased decline in sales and profits in fiscal year 2028. We are formulating plans to cushion the impact, including accelerating the development of our own core brands and fully releasing the contribution of our new business portfolio, including Marc Jacobs Beauty cosmetics, and Swarovski, Etro, Marni fragrances, and optimise cost structure through a large-scale fixed cost reduction plan."

"Fourth-quarter results sent early signals that the business was stabilizing, but the recovery process will not be smooth. Fiscal year 2027 will be a year of transformation: on the one hand, we will consolidate our core business and continue to build Coty with a leaner structure and more focused business; on the other hand, we will withdraw from Gucci's beauty licensing business before fiscal year 2028 (natural year 2027), and Complete the strategic evaluation of the mass beauty business and finalize the final product portfolio plan before the end of natural year 2026."

As of June 30, 2026, Coty's key financial data for the fourth quarter of fiscal year 2026 are as follows:

Net revenue increased by 1% year-on-year to US$1.2692 billion, and comparable sales fell by 1% year-on-year;

Gross profit was 61% based on the financial report and after adjustment;

Operating loss of US$42.7 million; adjusted operating profit fell 42% year-on-year to US$39.5 million;

Adjusted EBITDA fell 26% year-on-year to US$93.6 million;

Diluted earnings per share were ‑ $0.16; adjusted diluted earnings per share increased by 60% to ‑ $0.02;

Free cash flow was $72.6 million.

As of June 30, 2026, Coty's key financial data for the full year of fiscal year 2026 are as follows:

Net revenue fell 2% year-on-year to US$5.8066 billion, and comparable sales fell 5% year-on-year;

Gross profit was 63% based on the financial report and after adjustment;

Operating loss of US$81.5 million (operating profit for the same period last year was US$241.1 million); adjusted operating profit fell 27% year-on-year to US$626.7 million;

Adjusted EBITDA fell 22% year-on-year to US$846.9 million;

Diluted earnings per share fell 59% to ‑ $0.7; adjusted diluted earnings per share fell 5% to $0.21;

Free cash flow was $348.2 million.

By department:

--High-end beauty business: Net revenue in the fourth quarter was US$771.8 million, accounting for 61% of the company's total sales. It increased by 1% year-on-year based on financial reports, including a positive pull of 2% from foreign exchange contribution; comparable sales fell year-on-year by 0.5%, of which the Middle East conflict had a negative impact of about 1.5%.

Growth in the fourth quarter was mainly due to high-end cosmetics and fragrances, partially offset by a decline in revenue from the skin care business.

Net revenue for the year was US$3.8058 billion, accounting for 66% of the company's total sales. According to financial reports, it fell slightly year-on-year, and comparable sales fell 4%.

--Volkswagen Beauty Business: Net revenue in the fourth quarter was US$497.4 million, accounting for 39% of the company's total sales. It increased by 1% year-on-year based on financial reports, including a positive pull of 4% from foreign exchange contribution; comparable sales fell year-on-year. 3

Asia-Pacific Market: Net revenue increased by 11% year-on-year to US$185.6 million in the fourth quarter, with comparable sales growth of 7%, driven by sales from China, Southeast Asia, Oceania and New Zealand, as well as tourism retail channels. Yearly net revenue increased by 2% to US$7.219 billion, with comparable sales remaining flat year-on-year.

Outlook for First Quarter of Fiscal Year 2027:

Comparable sales are expected to decline by low to mid single digits;

Adjusted gross margin is expected to decline by 50-100 basis points year-on-year;

Adjusted EBITDA is expected to decline by low double digits year-on-year;

Adjusted EPS is expected to be between 0.11-0.13 USD.

｜Source: Official Financial Statements

｜Image Source: Official Financial Statements

｜Editor: LuxeCO

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