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

Key Points

• Coty beat quarterly estimates, reporting EPS of $0.16 versus $0.12 expected and revenue of $1.56 billion versus $1.53 billion expected. Revenue nevertheless declined 1.4% year over year.
• Sales trends remained challenging: Prestige and Consumer Beauty both underperformed their markets, while gross margin fell 120 basis points to 63.3% amid higher costs and unfavorable mix. Management expects a high-single-digit adjusted EBITDA decline in the second quarter.
• Cash flow improved, rising to $85 million, and net debt fell about $300 million to roughly $2.6 billion. Coty also reported growth among its six core Prestige brands, though management expects that growth to moderate in Q2.

Coty (NYSE:COTY - Get Free Report) released its earnings results on Wednesday. The company reported $0.16 earnings per share for the quarter, topping the consensus estimate of $0.12 by $0.04, FiscalAI reports. The business had revenue of $1.56 billion during the quarter, compared to the consensus estimate of $1.53 billion. Coty had a positive return on equity of 5.68% and a negative net margin of 10.42%. The business's revenue for the quarter was down 1.4% compared to the same quarter last year. During the same period last year, the company earned $0.12 earnings per share.

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 Stock Up 4.4%

COTY traded up $0.14 on Wednesday, hitting $3.44. The company had a trading volume of 8,141,726 shares, compared to its average volume of 5,224,946. The stock has a fifty day moving average price of $2.89 and a 200-day moving average price of $2.54. Coty has a 12-month low of $1.82 and a 12-month high of $4.16. The company has a debt-to-equity ratio of 0.96, a quick ratio of 0.42 and a current ratio of 0.75. The stock has a market capitalization of $3.03 billion, a price-to-earnings ratio of 15.67, a P/E/G ratio of 0.64 and a beta of 0.83.

Wall Street Analyst Weigh In

Several equities research analysts have issued reports on COTY shares. Royal Bank Of Canada cut shares of Coty from an "outperform" rating to a "sector perform" rating and set a $3.00 price objective for the company. in a research report on Thursday, August 20th. Weiss Ratings downgraded shares of Coty from a "sell (d-)" rating to a "sell (e+)" rating in a research report on Friday, October 30th. Deutsche Bank Aktiengesellschaft restated a "hold" rating and issued a $3.00 price target on shares of Coty in a report on Friday, August 21st. Zacks Research downgraded shares of Coty from a "hold" rating to a "strong sell" rating in a research note on Monday, October 26th. Finally, The Goldman Sachs Group reissued a "neutral" rating and set a $2.60 price objective on shares of Coty in a report on Thursday, August 20th. One analyst has rated the stock with a Buy rating, nine have assigned a Hold rating and three have issued a Sell rating to the stock. Based on data from MarketBeat, the stock has an average rating of "Reduce" and a consensus price target of $3.21.

Key Stories Impacting Coty

Here are the key news stories impacting Coty this week:

• Positive Sentiment: Fiscal Q1 FY2027 EPS was 16 cents versus the 12-cent consensus, and revenue of $1.56 billion topped the $1.53 billion estimate. Coty also said adjusted EBITDA and free cash flow were ahead of expectations, offering evidence of better-than-anticipated execution. Coty Announces First Quarter Fiscal Year 2027 Results
• Positive Sentiment: Coty extended its Marc Jacobs Beauty license for 40 years, securing a core prestige portfolio brand and the potential to continue developing established fragrance lines. The long duration supports brand continuity, though the announcement did not quantify its financial contribution. Coty Extends Marc Jacobs License
• Negative Sentiment: Despite the quarterly beat, like-for-like sales declined, and Coty forecast a soft second-quarter profit as higher costs weigh on its turnaround. That outlook may temper investor confidence in whether improved cash flow and stronger prestige brands can translate into sustained growth. Coty forecasts soft second-quarter profit

Coty Company Profile

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.

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