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Coty (COTY)
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Coty (COTY) AI Stock Analysis

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COTY

Coty

(NYSE:COTY)

Rating:46Neutral
Price Target:
$4.00
▼(-8.68% Downside)
Coty's overall stock score reflects significant challenges in financial performance and valuation, with bearish technical indicators. While there are strengths in gross profit margins and strategic initiatives, the immediate outlook is cautious due to market challenges and cost pressures.
Positive Factors
Cost Savings
Coty plans to deliver $130M in annual fixed cost savings through FY27 under its All-In To Win productivity program.
Financial Strategy
Commitment to deleveraging is clear, with a free cash flow yield of approximately 7% and a guide of over $350 million in the first half of FY26.
Fragrance Market Position
Coty is gaining resilient fragrance share, ranking #3 in the ~$50B prestige category and #1 in the ~$7B mass fragrance market in developed markets.
Negative Factors
Market Underperformance
COTY’s performance lagged in mass color cosmetics, with a decline of -5% for both shipments and sell-out.
Sales Decline
COTY anticipates a LFL sales decline of -6% to -8% in F1Q26 and a LFL sales decline of -3% to -5% in F2Q26, with a return to growth in F2H26.
U.S. Market Challenges
The company underperformed in its largest single market, the U.S., with prestige sales declining while the prestige category grew.

Coty (COTY) vs. SPDR S&P 500 ETF (SPY)

Coty Business Overview & Revenue Model

Company DescriptionCoty Inc. is a global beauty company specializing in cosmetics, skincare, fragrances, and hair color. Founded in 1904 and headquartered in New York City, Coty operates through various segments including Luxury, Professional, and Consumer Beauty. The company is renowned for its diverse portfolio of brands, which includes well-known names such as CoverGirl, Clairol, Calvin Klein fragrances, and many others. Coty aims to innovate and enhance beauty experiences for consumers worldwide through quality products and strategic brand collaborations.
How the Company Makes MoneyCoty generates revenue primarily through the sale of beauty products across its three main segments: Luxury, Professional, and Consumer Beauty. The Luxury segment includes high-end fragrances and cosmetics, often associated with designer brands. The Professional segment focuses on hair color and styling products sold through salons, while the Consumer Beauty segment encompasses mass-market cosmetics and fragrances. Coty's revenue model is driven by product sales through various distribution channels, including retail stores, e-commerce platforms, and professional salons. Additionally, Coty benefits from strategic partnerships with celebrities and fashion houses, which enhance brand visibility and attract diverse consumer demographics. The company's focus on innovation and product development also plays a crucial role in maintaining a competitive edge in the beauty industry.

Coty Key Performance Indicators (KPIs)

Any
Any
Adjusted Operating Margin by Segment
Adjusted Operating Margin by Segment
Measures profitability as a percentage of revenue for each business segment, indicating how well Coty is managing costs relative to sales in different areas.
Chart InsightsCoty's Prestige segment shows a volatile yet upward trend in operating margins, peaking in late 2024, despite disruptions in China and Asia. The Consumer Beauty segment struggles with consistent negative quarters, reflecting challenges in U.S. markets and cautious retailer inventory strategies. The earnings call highlights strong gross margin expansion and online sales growth, but ongoing issues in Consumer Beauty and cautious inventory management could hinder recovery. Coty remains optimistic about future growth, driven by strategic product launches and market expansion, aiming for improved EBITDA margins and sustained sales growth.
Data provided by:Main Street Data

Coty Earnings Call Summary

Earnings Call Date:Aug 20, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in prestige fragrance growth, EBITDA expansion, and digital commerce, but was overshadowed by challenges in the U.S. market, revenue declines, and cost pressures. While Coty has made strategic efforts to address these issues, the immediate outlook remains cautious.
Q4-2025 Updates
Positive Updates
Prestige Fragrance Growth
Prestige fragrances are now a $3.5 billion business for Coty, delivering a robust CAGR of +10% from fiscal '21 to fiscal '25.
EBITDA Growth and Margin Expansion
EBITDA grew at a CAGR of +9% from $760 million in fiscal '21 to $1.08 billion in fiscal '25, with EBITDA margin expanded by 190 basis points to 18.4%.
Debt Rating Improvements
Coty has received 12 consecutive debt rating upgrades since fiscal '20, now just one notch below investment grade across all three major rating agencies.
Digital and E-Commerce Growth
Coty delivered $1 billion in e-commerce revenues in fiscal '25, with Consumer Beauty sellout growing 18%, ahead of the market.
Fragrance Market Leadership
Coty is a top 3 player in the $50 billion prestige fragrances market with 12% market share, and holds the #1 position in the $7 billion mass fragrance market.
Negative Updates
U.S. Market Challenges
Coty lost market share in the U.S. prestige and mass segments, with like-for-like sales declining by mid-single-digit and mid-teen percentages, respectively.
Q4 Revenue Decline
Fiscal year '25 net revenues declined 2% like-for-like, and Q4 revenues declined 9%.
Inventory and Innovation Challenges
Coty faced significant pressure from retailer inventory buildup and headwinds from lapping fiscal year '24 innovation, impacting fiscal year '25.
Tariff and Cost Pressures
Coty expects a gross tariff headwind of approximately $70 million in fiscal year '26, with a more promotional environment impacting gross margin.
Company Guidance
In the call, Coty's leadership provided guidance highlighting several key metrics and strategic focuses for fiscal year 2026. They reported a 2% like-for-like decline in net revenues for fiscal year 2025, with a 9% decline in Q4, aligning with previous guidance. The company's Prestige fragrance business, a $3.5 billion segment, achieved a compound annual growth rate (CAGR) of over 10% from fiscal year 2021 to 2025, despite facing challenges such as U.S. market underperformance and retailer destocking. Coty's adjusted gross margin for fiscal year 2025 remained strong at 64.9%, with a 50 basis point expansion, although Q4 saw a 190 basis point decline due to a more promotional environment. The company ended fiscal year 2025 with adjusted EBITDA of $1.08 billion, maintaining an 18.4% margin, and achieved a leverage reduction from 6.8x in fiscal year 2021 to 3.5x in 2025. Looking forward, Coty anticipates sequential improvement in sales and profit trends throughout fiscal year 2026, with expectations for a return to growth in the second half, driven by new fragrance launches and strategic investments in high-return areas.

Coty Financial Statement Overview

Summary
Coty's financial performance is mixed, with declining revenue growth and profitability margins, high leverage, but strong gross profit margins and cash flow generation from operations. Strategic improvements are needed to enhance growth and profitability while managing leverage.
Income Statement
45
Neutral
Coty's income statement reveals a mixed performance. The company has experienced a decline in revenue growth, with a negative growth rate of -1.85% in the most recent year. Profitability metrics such as the net profit margin and EBIT margin have also deteriorated, with the net profit margin turning negative at -6.24%. However, the gross profit margin remains relatively strong at 64.84%, indicating efficient cost management. The declining revenue and profitability margins suggest challenges in maintaining growth and profitability.
Balance Sheet
50
Neutral
The balance sheet shows a moderate financial position. The debt-to-equity ratio is relatively high at 1.15, indicating significant leverage, which could pose risks in a volatile market. Return on equity has turned negative, reflecting recent losses. However, the equity ratio remains stable, suggesting a balanced asset structure. The high leverage and negative ROE highlight potential risks, but the stable equity ratio provides some stability.
Cash Flow
55
Neutral
Coty's cash flow statement indicates some challenges but also strengths. The free cash flow growth rate is negative, reflecting a decline in free cash flow generation. However, the operating cash flow to net income ratio is positive, suggesting that the company is generating cash from operations despite net losses. The free cash flow to net income ratio is also positive, indicating some efficiency in cash utilization. The mixed cash flow performance highlights both operational strengths and areas for improvement.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue5.89B5.89B6.12B5.55B5.30B4.63B
Gross Profit3.82B3.82B3.94B3.55B3.37B2.77B
EBITDA302.20M302.20M849.10M964.70M856.30M603.60M
Net Income-367.90M-367.90M89.40M508.20M259.50M-67.80M
Balance Sheet
Total Assets11.91B11.91B12.08B12.66B12.12B13.69B
Cash, Cash Equivalents and Short-Term Investments257.10M257.10M300.80M246.90M233.30M253.50M
Total Debt4.25B4.25B4.26B4.48B4.71B5.69B
Total Liabilities7.95B7.95B7.83B8.43B8.56B9.51B
Stockholders Equity3.69B3.69B3.83B3.95B3.30B3.90B
Cash Flow
Free Cash Flow277.60M277.60M369.40M402.90M552.50M144.80M
Operating Cash Flow492.60M492.60M614.60M625.70M726.60M318.70M
Investing Cash Flow-128.40M-128.40M-226.20M-118.20M269.70M2.44B
Financing Cash Flow-426.80M-426.80M-336.70M-469.30M-1.03B-2.80B

Coty Technical Analysis

Technical Analysis Sentiment
Negative
Last Price4.38
Price Trends
50DMA
4.75
Negative
100DMA
4.84
Negative
200DMA
5.68
Negative
Market Momentum
MACD
-0.17
Negative
RSI
46.28
Neutral
STOCH
80.63
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COTY, the sentiment is Negative. The current price of 4.38 is below the 20-day moving average (MA) of 4.50, below the 50-day MA of 4.75, and below the 200-day MA of 5.68, indicating a bearish trend. The MACD of -0.17 indicates Negative momentum. The RSI at 46.28 is Neutral, neither overbought nor oversold. The STOCH value of 80.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for COTY.

Coty Risk Analysis

Coty disclosed 44 risk factors in its most recent earnings report. Coty reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Coty Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$7.13B77.2112.97%18.61%-21.36%
65
Neutral
$3.68B22.7420.68%2.73%7.04%13.52%
63
Neutral
$20.49B14.78-2.98%3.11%1.86%-5.76%
58
Neutral
$1.10B17.524.12%2.54%-2.92%-43.06%
52
Neutral
$567.46M5.74-23.99%-4.39%-326.42%
50
Neutral
$32.67B147.29-24.69%1.60%-8.14%-389.12%
46
Neutral
$3.79B40.12-9.98%-3.68%-631.67%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
COTY
Coty
4.38
-4.79
-52.24%
EL
The Estée Lauder Companies
87.46
-0.96
-1.09%
HELE
Helen Of Troy
25.67
-27.26
-51.50%
IPAR
Inter Parfums
114.47
-4.96
-4.15%
EPC
Edgewell Personal Care
23.58
-15.43
-39.55%
ELF
e.l.f. Beauty
133.72
-1.97
-1.45%

Coty Corporate Events

Executive/Board Changes
Coty Appoints Beatrice Ballini as Lead Director
Neutral
Jul 18, 2025

On July 14, 2025, Johannes Huth resigned from his roles as director and Vice Chair of Coty Inc.’s Board of Directors after five years, with no disagreements cited regarding company operations. Subsequently, on July 16, 2025, Beatrice Ballini was appointed as the new Lead Independent Director, having been a board member since 2019 and chairing the Remuneration and Nomination Committee.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 28, 2025