Coty Inc
XMUN:CO3A
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Coty Inc
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Coty Inc
Coty Inc. makes and sells beauty products, with a big focus on fragrances, cosmetics, and skin and body care. It owns and licenses a mix of well-known brands that it sells through department stores, beauty retailers, drugstores, mass-market chains, travel retail, and e-commerce. In simple terms, Coty sits between brand building and product manufacturing: it creates the branded products, packages them, and gets them onto shelves and online. The company earns money when retailers, distributors, and online sellers buy its products, and in some cases through licensing arrangements tied to fragrance and beauty brands. Its main customers are consumers shopping for makeup, perfume, and personal care items, but its direct business relationship is usually with retail partners and beauty distributors rather than with shoppers themselves. Fragrance is especially important because many of Coty’s products are sold as branded, everyday consumer purchases and as prestige items in higher-end beauty channels. What makes Coty’s business different is the role it plays in beauty branding. Instead of owning stores, it depends on strong brand names, product formulas, packaging, and distribution relationships to move products through third-party retail channels. That means success depends on keeping brands desirable, managing licenses, and getting the right products into the right beauty aisles and counters around the world.
Coty Inc. makes and sells beauty products, with a big focus on fragrances, cosmetics, and skin and body care. It owns and licenses a mix of well-known brands that it sells through department stores, beauty retailers, drugstores, mass-market chains, travel retail, and e-commerce. In simple terms, Coty sits between brand building and product manufacturing: it creates the branded products, packages them, and gets them onto shelves and online.
The company earns money when retailers, distributors, and online sellers buy its products, and in some cases through licensing arrangements tied to fragrance and beauty brands. Its main customers are consumers shopping for makeup, perfume, and personal care items, but its direct business relationship is usually with retail partners and beauty distributors rather than with shoppers themselves. Fragrance is especially important because many of Coty’s products are sold as branded, everyday consumer purchases and as prestige items in higher-end beauty channels.
What makes Coty’s business different is the role it plays in beauty branding. Instead of owning stores, it depends on strong brand names, product formulas, packaging, and distribution relationships to move products through third-party retail channels. That means success depends on keeping brands desirable, managing licenses, and getting the right products into the right beauty aisles and counters around the world.
Q4 beat: Like-for-like sales declined 1%, ahead of guidance for a mid-single-digit decline, while adjusted EBITDA and adjusted EPS excluding the equity swap came in at the high end of guidance and ahead of expectations.
Profit pressure: Full-year adjusted EBITDA fell 22% and gross margin declined 190 basis points, hurt by lower volumes, excess inventory, tariffs and variable compensation.
Cash generation: Free cash flow rose approximately $70 million to $348 million despite a more than $200 million decline in EBITDA, helped by working-capital discipline, lower bonuses, interest and capital spending.
Transition year: Coty expects fiscal 2027 to be a transition year and is not providing full-year guidance while it simplifies the portfolio, restructures the organization and completes its strategic review.
Near-term outlook: Q1 fiscal 2027 like-for-like revenue is expected to decline by a low- to mid-single-digit percentage, with adjusted EBITDA down by a low-teens percentage and adjusted EPS of $0.11 to $0.13.
Gucci exit: The Kering agreement provides $400 million in cash plus inventory proceeds, but Gucci Beauty’s exit by fiscal 2028 will create a sizable mechanical profit headwind that Coty plans to offset through savings and core-brand investment.
Brand execution: Prestige Cosmetics, Kylie, Burberry makeup, Marc Jacobs and several consumer brands showed encouraging signs, but Coty’s sell-out remained below market growth in both divisions.