Q4 2026 Coty Inc Earnings Call Transcript
Key Points
- Coty Inc (COTY) is seeing strong early traction in its U.S. consumer beauty business, with CoverGirl and Sally Hansen significantly closing the sellout gap versus the market, and Sally Hansen now growing ahead of the market in value.
- The company has successfully renegotiated the Gucci license exit on favorable terms, securing full compensation for a year of profit and cash, funds for debt reduction and restructuring, and a solution for inventory.
- Coty Inc (COTY) is implementing a disciplined 'Color the Future' program, focusing on fewer, more powerful innovations and reducing SKUs by 20%, which is expected to reduce returns and obsolescence, boosting EBITDA over time.
- The company is shifting its incentive structure to prioritize market share and sellout, aligning the organization with a more sustainable, consumer-driven growth strategy.
- Coty Inc (COTY) is seeing a recovery in Brazil, with the market growing and the company regaining share, supported by strength in mass body and skincare.
- The company is investing in activity-building advertising for key franchises like CoverGirl's Simply Ageless and Lash Blast, and Sally Hansen's InstaDrive, which is driving improved sellout performance.
- Coty Inc (COTY) is planning a comprehensive restructuring program to offset the impact of the Gucci departure, with a 'belts and suspenders' approach combining cost savings and growth initiatives.
- The company is leveraging travel retail as a strategic channel for brand image and launch visibility, which is currently growing nicely.
- Coty Inc (COTY) is targeting fiscal 2027 EBITDA and free cash flow close to fiscal 2020 levels, with a clear framework to improve sellout and profitability.
- The company is rolling out successful U.S. interventions to European brands like Rimmel, Max Factor, and Bourgeois, with early positive signs in the UK.
- Coty Inc (COTY)'s sellout has been trailing below the category for the last couple of quarters, leading to lower sell-in and operational problems.
- The company's fiscal 2027 is characterized as a 'transition year' with expectations of similar trends in Q1, indicating continued challenges ahead.
- Coty Inc (COTY) faces uncertainty in the Middle East and oil price volatility, which could impact profitability, despite some potential upside from lower oil prices.
- The company is still awaiting a potential tariff refund of about $30 million, which is uncertain and could affect financial results.
- Coty Inc (COTY) has not yet implemented its improvement program in European consumer brands, which are lagging behind the U.S., and the timeline for improvement is uncertain.
- The promotional environment remains elevated, with competitors taking pricing actions that could pressure margins.
- Coty Inc (COTY) is experiencing a decline in EBITDA, partly due to returns and obsolescence in the consumer beauty business, which will take time to resolve.
- The strategic review of the consumer beauty business is a complex process with interdependencies, and the deadline of calendar 2026 is a strong aspiration but not guaranteed.
- The company's innovation has not been incremental enough, failing to create a halo effect on total business, as seen with the Boss Bond & Beyond launch.
- Coty Inc (COTY) faces the risk of losing shelf space if sellout does not improve, despite efforts to maintain stable shelf presence.
Good morning and good afternoon, everyone. My name is Chelsea, and I'll be your conference operator today.
At this time, I would like to welcome everyone to COTI's fourth quarter fiscal 2026 question-and-answer conference call.
As a reminder, this conference call is being recorded today, August 20, 2026, at 8:00 AM Eastern Time or 2:00 PM Central European Time.
Please note that on August 19 at approximately 4:30 PM Eastern Time or 10:30 PM Central European Time, Cody issued a press release and prepared remarks webcast, which can be found on his Investor Relations website.
On today's call are Markus Strobel, Executive Chairman of the Board and Interim Chief Executive Officer, and Laurent Mercier, Chief Financial Officer.
I would like to remind you that many of the comments today may contain forward-looking statements.
Please refer to Cody's earnings release and the reports filed with the SEC where the company lists factors that could cause actual results to differ materially from those forward-looking statements.
In addition, except where
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
