Coty sees weak quarterly profit, withholds annual forecasts in 'transition year'

Coty Inc. reported full-year sales of $5.81 billion and a net loss of $604.8 million, while confirming its exit from the Gucci Beauty license. The company appointed Soraya Benchikh as incoming CFO, aiming to address profitability pressures. Analysts project varying revenue and earnings forecasts for 2029, with optimistic and pessimistic outlooks differing significantly.

Coty (COTY) reported Q4 revenue of $1.27b but a net loss of $144.3m, with adjusted EBITDA falling sharply. Shares slipped 0.4% to $2.74. Bulls highlight free cash flow and debt reduction, while bears point to margin pressure and high leverage. Prestige brands remain a focus, but Consumer Beauty EBITDA declined 67% YoY.

Coty reported Q4 revenue of $1.27B, beating estimates, but forecast Q1 EPS below expectations and withheld annual guidance. Shares fell 7% after hours. The company is undergoing a business overhaul, including a potential sale of brands like CoverGirl and Rimmel, and appointed a new CFO. Coty expects like-for-like revenue to decline in Q1, with Middle East conflict and oil prices impacting results.

U.S. equity indexes fell as Treasury yields rose, hurting risk appetite. Walmart shares dropped 9.2% after missing sales expectations, dragging down consumer sectors. Oil prices rose, increasing inflation concerns. Other retailers like Costco and Dollar Tree also declined. Bond yields advanced despite Treasury repurchase plans. The Dow, S&P 500, and Nasdaq all fell, with consumer staples and healthcare among the worst-performing sectors. Cryptocurrency-related stocks rallied over 7%.

Coty reported a wider net loss of $618M for fiscal 2025/26, up from $381M a year earlier, with sales falling 5% to $5.8B. Q4 sales rose 1%, showing early signs of stabilization. The company plans to use proceeds from the Gucci Beauty license transfer to Kering to reduce debt and invest in its core business. Coty forecasts a 'transition' year in fiscal 2027 as it refocuses on fragrances and beauty products.

Coty aims to return its portfolio, excluding Gucci, to growth by 2028. The company will focus on innovation and brand investment, particularly for Hugo Boss and Marc Jacobs. Coty will receive $400 million from L’Oréal for the early transfer of the Gucci Beauty license. The company plans to complete a review of its consumer beauty business by the end of 2026.