Coty (NYSE:COTY) saw its shares tumble more than 21% in premarket trading on Thursday after the company reported a surprise quarterly loss and flagged softer sales and profit in the first half (H1) of fiscal year 2026 (F26), with growth expected to resume later.
The maker of CoverGirl and Gucci fragrances posted a fourth-quarter loss of 5 cents per share, missing analysts’ average forecast of a 2 cent profit.
Revenue rose slightly to $1.25 billion from $1.21 billion a year earlier, edging past forecasts of $1.21 billion. Adjusted EBITDA came in at $127 million, compared with the $131 million consensus. Adjusted operating income (EBIT) fell to $68 million, well below Barclays analysts’ $98 million estimate.
“Coty’s F4Q25 sales decline was spot in-line with our estimate, at the upper end of management’s expected sales decline (high single digit), but the bigger headline for us is the stark EBIT shortfall, stemming both from weaker gross margins and higher SG&A,” the analysts noted.
Looking ahead, Coty expects like-for-like sales to drop 6% to 8% in the first quarter of fiscal 2026 and 3% to 5% in the second quarter, as cautious retailer orders, tariffs, and a more promotional environment weigh on performance.
The company anticipates a rebound in the second half as new fragrance launches, geographic expansion, and easier year-on-year comparisons take effect. Coty also projected adjusted EPS of 33 to 36 cents for the first half, a high single- to mid-teen percentage decline compared with last year. Adjusted EBITDA is expected to fall in double digits in H1 before improving later in the fiscal year.
“With F1H26 LFL sales and Adjusted EBITDA declines expected to be far worse than our already below-Consensus estimates, this implies a far steeper hill to climb in F2H26,” Barclays analysts added.
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