Coty (NYSE:COTY) shares dropped around 5.9% in premarket trading on Thursday after the beauty group’s latest earnings release raised concerns over its near-term outlook, reversing a strong gain recorded during the previous regular session.
The stock fell to $2.85 after Coty reported fiscal fourth-quarter 2026 revenue of $1.27 billion, comfortably ahead of the approximately $1.19 billion expected by analysts. However, adjusted earnings disappointed, with the company posting a loss of $0.02 per share compared with expectations for earnings of $0.01 per share.
Investor attention was also drawn to management’s decision not to provide full-year fiscal 2027 guidance, with Coty describing the period as a “transition year.”
Q1 guidance falls short of expectations
Coty expects adjusted earnings per share of between $0.11 and $0.13 for the first quarter of fiscal 2027, below the analyst consensus of approximately $0.14.
The company also forecast a low- to mid-single-digit percentage decline in like-for-like revenue during the quarter, adding to concerns that sales pressures could persist into the new financial year.
Fourth-quarter like-for-like revenue declined 1%, with management estimating that the continuing Middle East conflict created a roughly 1% headwind.
For the full fiscal year, Coty generated revenue of $5.81 billion, down from $5.89 billion in fiscal 2025.
The combination of weaker comparable sales, cautious first-quarter guidance and the absence of a full-year forecast overshadowed the better-than-expected quarterly revenue figure.
CFO change adds to period of transition
Coty also announced a change at the top of its finance operation. Soraya Benchikh, previously with British American Tobacco, will become chief financial officer on September 1, 2026, succeeding Laurent Mercier.
The leadership transition comes as Coty works through a period of operational adjustment and seeks to improve earnings performance following weaker sales trends.
Investors appear particularly focused on the lack of visibility surrounding fiscal 2027, with management’s description of the year as a “transition year” reinforcing expectations that a meaningful recovery may take time.
Analysts remain cautious on Coty
Wall Street sentiment was already restrained ahead of the results. Barclays maintained a Sell rating on Coty, while Jefferies remained at Hold.
Following the earnings announcement, TD Cowen increased its price target to $2.90 while retaining a Hold recommendation. Morgan Stanley raised its target to $2.50 and maintained an Equal Weight rating.
Those adjustments offered only limited encouragement, particularly after Coty shares had rallied more than 10% during Wednesday’s regular session ahead of the earnings release.
The resulting disappointment therefore produced an especially sharp reversal as investors unwound positions established before the results.
Coty weakness appears company-specific
Broader U.S. markets provided little directional influence. The S&P 500 edged just 0.03% higher, while the Dow Jones slipped 0.03% and the Nasdaq gained 0.08%.
The muted moves across the major indices indicate that Coty’s decline was primarily driven by its own earnings and guidance rather than a broader deterioration in market sentiment.
The contrast with beauty-sector peers such as Estée Lauder and Elf Beauty also placed additional focus on Coty’s outlook, as those companies had provided comparatively stronger forward guidance.
Ultimately, Coty’s better-than-expected fourth-quarter revenue was insufficient to outweigh the adjusted EPS miss, softer first-quarter earnings forecast, declining like-for-like sales and management’s decision to withhold full-year guidance.
With the shares trading at $2.85, compared with a 52-week high of $4.56, investors appear to be factoring in an extended transition period before the company can deliver a more convincing recovery in sales and profitability.