Coty Inc. COTY delivered mixed results for the second quarter of fiscal 2026, as earnings fell short of expectations, while revenues topped estimates. The quarter reflected improving sales momentum compared to recent periods but continued margin pressure from a promotional environment, tariffs and volume softness, particularly in Consumer Beauty.
For the second quarter of fiscal 2026, Coty delivered adjusted earnings of 14 cents per share, which missed the Zacks Consensus Estimate of 18 cents. The bottom line improved from 11 cents in the year-ago quarter, including a 4-cent adverse impact from the equity swap mark-to-market.
Americas : Revenues declined 2% reported and 3% LFL, reflecting weaker Prestige fragrance trends and an ongoing sell-out gap in U.S. mass cosmetics.
EMEA : Revenues rose 3% reported, aided by foreign exchange, but fell 4% LFL due to pressure in Prestige fragrance and Consumer Beauty color cosmetics.
Asia Pacific: Revenues slipped 1% reported and 2% LFL, with strength in China and Japan partly offset by weakness in Southeast Asia.
During the quarter, Coty appointed Markus Strobel as Executive Chairman and Interim CEO, who introduced the "Coty. Curated." strategic framework, emphasizing sharper priorities, focused investments and stronger execution behind core brands. The company also completed the sale of its remaining 25.8% stake in Wella, receiving $750 million in upfront proceeds, which materially strengthened the balance sheet.
The Zacks Rank #3 (Hold) company ended the quarter with financial net debt of $2.6 billion and a leverage ratio of 2.7, the lowest level in more than nine years. Free cash flow was robust at $513.1 million for the quarter, driven by improved working-capital dynamics.
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