Coty Inc. (NYSE: COTY) reported a net loss of $126.9 million for the quarter ended December 31 2025, translating to diluted earnings per share of –$0.14. The loss was driven by a combination of a $201.9 million loss on the sale of its remaining stake in Wella, higher promotional spend, tariff costs, and a lower sales mix in the Consumer Beauty segment.
Revenue for the quarter reached $1.678 billion, a 1 % increase on a reported basis and a 3 % decline on a like‑for‑like basis. The Prestige fragrance business generated $1.133 billion in net revenue, up 2 % reported, while Consumer Beauty revenue fell to $545 million, a 2 % decline reported and 6 % LFL. The modest revenue growth was offset by margin compression, with reported gross margin falling 290 basis points year‑over‑year to 32.1 % and operating margin slipping to 8.8 % from 16.1 % a year earlier.
Operating income dropped to $148.2 million, a 45 % decline from $268.2 million in the same quarter a year ago. The sharp decline reflects the impact of the Wella stake sale loss, elevated selling, general and administrative expenses, and intensified promotional activity. Gross margin contraction was driven by higher raw‑material costs and tariff impacts, while the lower sales mix in Consumer Beauty further eroded profitability.
Coty missed analysts’ consensus EPS estimate of $0.18, reporting –$0.14, a miss of $0.32 or 177.8 % below expectations. The company beat revenue expectations by $20 million, surpassing the $1.66 billion estimate by 1.2 %. The EPS miss was largely due to the one‑time Wella sale loss and margin pressure, while the revenue beat was supported by a 2 % increase in Prestige fragrance sales and modest growth in travel retail and emerging markets.
Management withdrew its full‑year 2026 guidance for EBITDA and free cash flow, providing guidance only for Q3. The decision reflects uncertainty in the beauty market and a focus on executing the “Coty. Curated.” strategic framework, which aims to simplify the business, concentrate on core brands, and improve operational discipline. The company has reduced net debt to multi‑year lows, a positive sign for financial stability.
Executive Chairman and interim CEO Markus Strobel said, “While our financial performance over the past year and a half has been disappointing, we have outstanding assets and capabilities. The “Coty. Curated.” framework will sharpen priorities, focus investments, and drive profitable growth.” The comments underscore management’s confidence in the long‑term turnaround despite short‑term earnings volatility.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.