Coty misses by $0.03, reports revs in-line; guides Q2 EPS in-line (3.78 -0.05)
- Reports Q1 (Sep) earnings of $0.12 per share, excluding non-recurring items, $0.03 worse than the FactSet Consensus of $0.15; revenues fell 5.6% year/year to $1.58 bln vs the $1.58 bln FactSet Consensus.
- Co issues in-line guidance for Q2, sees EPS of $0.18-$0.21, excluding non-recurring items, vs. $0.19 FactSet Consensus.
- Consumer demand for beauty continues to be solid, particularly for fragrances across price points and formats. At the same time, broader macroeconomic and tariff uncertainty is fueling cautious retailer ordering and a more promotional competitive environment. Against this backdrop, Coty is launching major innovations, capturing new growth opportunities with a multi-brand push into ultra premium fragrances and fragrance mists, and expanding distribution across fragrances. In parallel, the Company continues to progress on right-sizing retailer inventories to current demand trends to drive alignment between sell-in and sell-out.
- Consistent with its prior outlook, Coty expects a gradual improvement in sales trends over the course of FY26 from the 4Q25 LFL levels, when the Company actively intervened to clean up the baseline of the business. With strong sales delivery in the month of October, particularly in Prestige, Coty expects Q2 LFL sales to be at the more favorable end of prior guidance of a LFL decline of -3% to -5%, with sequential trend improvement in both Prestige and Consumer Beauty. On the reported revenue side, Coty estimates a low-to-mid-single-digit percentage FX benefit in Q2. The Company continues to expect LFL sales to return to growth in 2H26, as sell-in and sell-out reach alignment, and supported by several key launches in Prestige, as well as more favorable comparisons.
- Coty continues to expect a gradual profit trend improvement, with adjusted EBITDA declining by a low-to-mid teens percentage in 2Q26, consistent with its prior guidance. The Company also expects to return to adjusted EBITDA growth in 2H26, targeting $1 billion in adjusted EBITDA in FY26. While this outlook implies very strong year-over-year expansion in 2H26 adjusted EBITDA, this is primarily a function of prior year comparisons, with an implied low-single-digit growth in 2H26 adjusted EBITDA on a 2-year basis.