Coty (COTY) Misses Q4 EPS by 1c, offers outlook

Coty (NYSE: COTY) reported Q4 EPS of ($0.02), $0.01 worse than the analyst estimate of ($0.01). Revenue for the quarter came in at $1.27 billion versus the consensus estimate of $1.19 billion.

Outlook

Coty expects 1Q27 LFL revenue to decline by a low- to mid-single-digit percentage. While sell-out trends for both divisions are expected to be broadly consistent with the trends in the second half of FY26, the timing of customer orders and prior year comparisons are expected to contribute to fluctuations in year-over-year sales trends. On a reported basis, Coty expects FX to have a neutral impact on revenue in the quarter.

Adjusted gross margin in 1Q27 is expected to decline by approximately 50 to 100 basis points year-over-year, reflecting cost absorption headwinds from lower shipments, partially offset by productivity initiatives and procurement actions. Coty anticipates 1Q27 adjusted EBITDA to decline by a low-teens percentage, representing a sequential improvement from the more significant declines in the second half of FY26. This is expected to result in adjusted EPS, excluding the equity swap, of $0.11 to $0.13 per share.

Supported by the seasonally strong business dynamics in the first half, as well as continued disciplined capital expenditure and working capital management, Coty expects free cash flow for the first half of FY27 of over $300 million.

FY27 is expected to be a transition year as Coty completes its strategic review and advances the early-stage implementation of Coty.Curated. Accordingly, at this stage Coty is providing guidance for Q1 and visibility into first-half free cash flow. Coty\'s Q1 EBITDA outlook reflects sequential improvement from year-over-year trends in the second half of FY26. The Company expects performance to strengthen progressively throughout FY27, supported by innovation, disciplined execution, cost savings, and strong cash flow generation. Overall, year-over-year EBITDA trends are expected to improve over the course of FY27, supported by ongoing productivity initiatives and cost discipline. Following the expected completion of the Company\s strategic review by the end of CY26, and as implementation of Coty.Curated progresses, Coty expects to provide a broader outlook supported by greater visibility into Coty's growth and profitability trajectory.

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