Coty Q2 Earnings Miss Expectations Amid Market Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy COTY?
Source: seekingalpha
- Earnings Performance: Coty's Q2 non-GAAP EPS of $0.14 missed expectations by $0.04, highlighting the challenges the company faces in a complex beauty market environment.
- Revenue Growth: While total revenue reached $1.68 billion, a 0.6% year-over-year increase that beat market expectations by $20 million, it was insufficient to offset the decline in profitability.
- Guidance Adjustment: Due to weakening consumer beauty sales trends, Coty has withdrawn its FY26 guidance for EBITDA and free cash flow, providing only Q3 guidance, which anticipates a mid-single-digit percentage decline in like-for-like revenues.
- Stock Reaction: Following the earnings report, Coty's shares fell by 7%, reflecting investor concerns about the company's future performance, particularly in light of leadership transitions.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy COTY?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on COTY
Wall Street analysts forecast COTY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for COTY is 4.61 USD with a low forecast of 3.00 USD and a high forecast of 10.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
1 Buy
10 Hold
2 Sell
Hold
Current: 3.430
Low
3.00
Averages
4.61
High
10.00
Current: 3.430
Low
3.00
Averages
4.61
High
10.00
About COTY
Coty Inc. is a beauty company with a portfolio of brands across fragrance, color cosmetics, and skin and body care. The Company has a diverse portfolio of brands, which includes both owned and licensed. Its brand portfolio is classified into two segments: Consumer beauty and Prestige. The consumer beauty brands include Adidas, Beckham, Bozzano, Bourjois, Bruno Banani, CoverGirl, Jovan, Mexx, LeGer by Lena Gercke, Monange, Nautica, Paixao, Rimmel, Risque, Sally Hansen, and Vera Wang. Its prestige brands include Burberry, Calvin Klein, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Kylie Cosmetics by Kylie Jenner, Lancaster, Marc Jacobs, Miu Miu, Orveda, and Tiffany & Co. Its mass beauty brands are primarily sold through hypermarkets, supermarkets, drug stores and pharmacies, mid-tier department stores, traditional food and drug retailers, and dedicated e-commerce retailers. It markets, sells and distributes its products in over 120 countries and territories.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Coty Warns of Soft Sales, Shares Decline
- Sales Warning: Coty has warned of soft full-year sales due to persistent promotional activities, which has spooked investors and pressured shares in late trading, reflecting disappointing financial performance over the past year and a half.
- Strategic Framework Shift: Interim CEO Markus Strobel announced the initiation of the 'Coty. Curated' strategic framework aimed at sharper priorities and more focused investments to improve execution and bolster support for core businesses.
- Financial Performance Review: In the fiscal second quarter, Coty reported an adjusted profit of $0.14 per share, a 27% increase year-over-year but 4 cents below expectations, with total revenue reaching $1.68 billion, $20 million better than expected, although a decline in consumer beauty revenue nearly offset a 2% increase in prestige net revenue.
- Uncertain Future Outlook: Coty has withdrawn its FY26 EBITDA and free cash flow guidance, expecting a mid-single-digit percentage decline in like-for-like revenue in Q3 primarily due to weakening consumer beauty sales trends, with adjusted EBITDA projected between $100 million and $110 million, significantly lower than the $204.3 million estimates.
See More
Coty Q2 Earnings Miss Expectations Amid Market Challenges
- Earnings Performance: Coty's Q2 non-GAAP EPS of $0.14 missed expectations by $0.04, highlighting the challenges the company faces in a complex beauty market environment.
- Revenue Growth: While total revenue reached $1.68 billion, a 0.6% year-over-year increase that beat market expectations by $20 million, it was insufficient to offset the decline in profitability.
- Guidance Adjustment: Due to weakening consumer beauty sales trends, Coty has withdrawn its FY26 guidance for EBITDA and free cash flow, providing only Q3 guidance, which anticipates a mid-single-digit percentage decline in like-for-like revenues.
- Stock Reaction: Following the earnings report, Coty's shares fell by 7%, reflecting investor concerns about the company's future performance, particularly in light of leadership transitions.
See More
Coty Reports Q2 Results: Net Debt Reduced to Lowest Level in Nearly a Decade
- Financial Performance Overview: Coty reported net revenues of $1.678 billion for Q2 FY2026, reflecting a 1% year-over-year increase, yet the adjusted net income showed a significant loss of $126.9 million attributable to common shareholders, indicating pressure in market competition.
- Debt Management Success: As of December 31, 2025, Coty's total debt stood at $3.038 billion with financial net debt at $2.601 billion, resulting in a financial leverage ratio of 2.7x, showcasing the company's proactive efforts in reducing liabilities, which enhances future financial flexibility.
- Strategic Framework Launch: Coty initiated its “Coty. Curated.” strategic framework aimed at improving performance through sharper investments and execution, expected to bolster market share in core business areas, particularly in key markets like the U.S., U.K., and Germany.
- Future Outlook Adjustment: Due to a complex market backdrop, Coty has withdrawn its prior FY2026 guidance for EBITDA and free cash flow, anticipating a mid-single-digit percentage decline in Q3 revenues primarily driven by weakening trends in Consumer Beauty sales.
See More
Coty Set to Announce Q2 Earnings with Optimistic Market Expectations
- Earnings Announcement Date: Coty is set to release its Q2 2023 earnings report on February 5th after market close, with a consensus EPS estimate of $0.18, reflecting a significant year-over-year increase of 63.6%, indicating improved profitability.
- Revenue Expectations: The revenue forecast stands at $1.66 billion, representing a slight decline of 0.6% year-over-year, which highlights the impact of intensified market competition and changing consumer trends on sales.
- Historical Performance Review: Over the past two years, Coty has only beaten EPS estimates 25% of the time and revenue estimates 50% of the time, showcasing uncertainty in the company's financial forecasting.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen three upward revisions and four downward adjustments, while revenue estimates experienced seven upward revisions and one downward adjustment, indicating divergent views among analysts regarding Coty's future performance.
See More
Estee Lauder's Skin Care Sales Rise 3% to $1.575 Billion Amid Recovery
- Skin Care Recovery: Estee Lauder's first-quarter skin care sales increased by 3% to $1.575 billion, indicating a recovery after prolonged softness, with core brands like La Mer and Estee Lauder driving overall sales growth.
- Market Share Gains: In the U.S. prestige beauty market, Estee Lauder reported an 8% retail growth in skin care, surpassing the broader category's 6% growth, reflecting the brand's sustained appeal among consumers, particularly driven by The Ordinary.
- Enhanced Profitability: The skin care segment's operating income rose by 60% year over year, supported by higher sales and operational efficiencies from the Profit Recovery and Growth Plan, showcasing significant progress in improving profitability.
- Ongoing Market Challenges: Despite encouraging first-quarter results, global travel retail remains volatile, particularly in Eastern markets, with management noting that while consumer sentiment in Mainland China is improving, it remains subdued compared to historical peaks, necessitating cautious navigation of the macroeconomic environment ahead.
See More
Rimmel London Partners with Red Bull for 52-Story Performance Launching Thrill Seeker Mascara
- High-Altitude Performance: Rimmel London collaborates with Red Bull to feature five-time All-American gymnast Lily Smith performing a 90-second balance beam routine 52 stories high, showcasing the brand's innovative spirit and commitment to extreme challenges.
- Mascara Innovation: The newly launched Thrill Seeker Mega Lift mascara utilizes advanced formula technology to deliver up to six times more visible lash volume compared to bare lashes, targeting consumers who embrace bold styles.
- Brand Image Building: This partnership not only highlights Lily's courage and creativity but also reflects Rimmel's 190-year heritage, emphasizing the brand's focus on self-expression and innovation in the beauty industry.
- Global Marketing Campaign: Lily will feature in the global marketing campaign starting January 2026, leveraging social media and digital partnerships to further enhance Rimmel's market presence.
See More
Coty Warns of Soft Sales, Shares Decline
- Sales Warning: Coty has warned of soft full-year sales due to persistent promotional activities, which has spooked investors and pressured shares in late trading, reflecting disappointing financial performance over the past year and a half.
- Strategic Framework Shift: Interim CEO Markus Strobel announced the initiation of the 'Coty. Curated' strategic framework aimed at sharper priorities and more focused investments to improve execution and bolster support for core businesses.
- Financial Performance Review: In the fiscal second quarter, Coty reported an adjusted profit of $0.14 per share, a 27% increase year-over-year but 4 cents below expectations, with total revenue reaching $1.68 billion, $20 million better than expected, although a decline in consumer beauty revenue nearly offset a 2% increase in prestige net revenue.
- Uncertain Future Outlook: Coty has withdrawn its FY26 EBITDA and free cash flow guidance, expecting a mid-single-digit percentage decline in like-for-like revenue in Q3 primarily due to weakening consumer beauty sales trends, with adjusted EBITDA projected between $100 million and $110 million, significantly lower than the $204.3 million estimates.
See More
Coty Q2 Earnings Miss Expectations Amid Market Challenges
- Earnings Performance: Coty's Q2 non-GAAP EPS of $0.14 missed expectations by $0.04, highlighting the challenges the company faces in a complex beauty market environment.
- Revenue Growth: While total revenue reached $1.68 billion, a 0.6% year-over-year increase that beat market expectations by $20 million, it was insufficient to offset the decline in profitability.
- Guidance Adjustment: Due to weakening consumer beauty sales trends, Coty has withdrawn its FY26 guidance for EBITDA and free cash flow, providing only Q3 guidance, which anticipates a mid-single-digit percentage decline in like-for-like revenues.
- Stock Reaction: Following the earnings report, Coty's shares fell by 7%, reflecting investor concerns about the company's future performance, particularly in light of leadership transitions.
See More
Coty Reports Q2 Results: Net Debt Reduced to Lowest Level in Nearly a Decade
- Financial Performance Overview: Coty reported net revenues of $1.678 billion for Q2 FY2026, reflecting a 1% year-over-year increase, yet the adjusted net income showed a significant loss of $126.9 million attributable to common shareholders, indicating pressure in market competition.
- Debt Management Success: As of December 31, 2025, Coty's total debt stood at $3.038 billion with financial net debt at $2.601 billion, resulting in a financial leverage ratio of 2.7x, showcasing the company's proactive efforts in reducing liabilities, which enhances future financial flexibility.
- Strategic Framework Launch: Coty initiated its “Coty. Curated.” strategic framework aimed at improving performance through sharper investments and execution, expected to bolster market share in core business areas, particularly in key markets like the U.S., U.K., and Germany.
- Future Outlook Adjustment: Due to a complex market backdrop, Coty has withdrawn its prior FY2026 guidance for EBITDA and free cash flow, anticipating a mid-single-digit percentage decline in Q3 revenues primarily driven by weakening trends in Consumer Beauty sales.
See More
Coty Set to Announce Q2 Earnings with Optimistic Market Expectations
- Earnings Announcement Date: Coty is set to release its Q2 2023 earnings report on February 5th after market close, with a consensus EPS estimate of $0.18, reflecting a significant year-over-year increase of 63.6%, indicating improved profitability.
- Revenue Expectations: The revenue forecast stands at $1.66 billion, representing a slight decline of 0.6% year-over-year, which highlights the impact of intensified market competition and changing consumer trends on sales.
- Historical Performance Review: Over the past two years, Coty has only beaten EPS estimates 25% of the time and revenue estimates 50% of the time, showcasing uncertainty in the company's financial forecasting.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen three upward revisions and four downward adjustments, while revenue estimates experienced seven upward revisions and one downward adjustment, indicating divergent views among analysts regarding Coty's future performance.
See More
Estee Lauder's Skin Care Sales Rise 3% to $1.575 Billion Amid Recovery
- Skin Care Recovery: Estee Lauder's first-quarter skin care sales increased by 3% to $1.575 billion, indicating a recovery after prolonged softness, with core brands like La Mer and Estee Lauder driving overall sales growth.
- Market Share Gains: In the U.S. prestige beauty market, Estee Lauder reported an 8% retail growth in skin care, surpassing the broader category's 6% growth, reflecting the brand's sustained appeal among consumers, particularly driven by The Ordinary.
- Enhanced Profitability: The skin care segment's operating income rose by 60% year over year, supported by higher sales and operational efficiencies from the Profit Recovery and Growth Plan, showcasing significant progress in improving profitability.
- Ongoing Market Challenges: Despite encouraging first-quarter results, global travel retail remains volatile, particularly in Eastern markets, with management noting that while consumer sentiment in Mainland China is improving, it remains subdued compared to historical peaks, necessitating cautious navigation of the macroeconomic environment ahead.
See More
Rimmel London Partners with Red Bull for 52-Story Performance Launching Thrill Seeker Mascara
- High-Altitude Performance: Rimmel London collaborates with Red Bull to feature five-time All-American gymnast Lily Smith performing a 90-second balance beam routine 52 stories high, showcasing the brand's innovative spirit and commitment to extreme challenges.
- Mascara Innovation: The newly launched Thrill Seeker Mega Lift mascara utilizes advanced formula technology to deliver up to six times more visible lash volume compared to bare lashes, targeting consumers who embrace bold styles.
- Brand Image Building: This partnership not only highlights Lily's courage and creativity but also reflects Rimmel's 190-year heritage, emphasizing the brand's focus on self-expression and innovation in the beauty industry.
- Global Marketing Campaign: Lily will feature in the global marketing campaign starting January 2026, leveraging social media and digital partnerships to further enhance Rimmel's market presence.
See More
