코티(COTY) 2026 회계연도 4분기 실적 발표 컨퍼런스 콜: 2027 회계연도 전환 및 구찌 구조조정

코티(Coty)의 2026 회계연도 4분기 실적 발표회는 출하(sell-in) 중심에서 소비자 실매출(sell-out) 중심으로의 전환, 2027 회계연도 전환 계획, 그리고 예상되는 구찌(Gucci) 라이선스 종료 영향에 대한 대비에 중점을 두었습니다. 경영진은 2027 회계연도의 최우선 과제로 점유율 개선, 수익성 안정화, 재고 변동성 축소를 제시했습니다.

핵심 요약

• 경영진이 공식 가이던스를 1분기에 대해서만 제시했음에도 불구하고, 코티는 2027 회계연도 EBITDA 및 잉여현금흐름(FCF)을 2026 회계연도 수준에 가깝게 유지하는 것을 목표로 하고 있습니다.
• 경영진은 1분기 흐름이 지난 2개 분기와 비슷하게 유지된 후, 혁신, 집행 비용의 집중, 실매출 증대 방안이 효과를 발휘하면서 분기를 거듭할수록 개선될 것으로 전망하고 있습니다.
• 매출 및 비중 있는 EBITDA 항목과 더불어 시장 점유율과 실매출(sell-out)이 2027 회계연도의 주요 임직원 인센티브 평가 지표로 추가되었습니다.
• 코티는 컨슈머 뷰티 부문의 진열 SKU를 약 20% 축소할 계획입니다. 경영진은 매출에 실질적인 영향은 없을 것으로 예상하며, 전체 진열 공간은 전반적으로 안정적으로 유지될 것이라고 밝혔습니다.
• 2027 회계연도의 잠재적 실적 상방 요인으로는 약 3,000만 달러 규모의 관세 환급과 예산 대비 낮은 유가 관련 비용이 꼽힙니다. 코티는 유가 90~100달러를 기준으로 2,000만~3,000만 달러의 비용을 반영해 둔 상태입니다.
• 회사 측은 2026년 말까지 컨슈머 뷰티 부문의 전략적 검토를 완료하겠다는 강력한 의지를 갖고 있으며, 추가 시간을 들여 실질적으로 훨씬 더 나은 결과를 얻을 수 있는 경우에는 약간의 유연성을 남겨두고 있습니다.

핵심 재무 데이터

사업 및 경영 성과

코티의 주요 경영 목표는 실매출(sell-out) 성과와 전체 시장 간의 격차를 줄이는 것입니다. 경영진은 최근 몇 분기 동안 실매출 성장이 해당 카테고리 전체에 뒤처지면서 출하(sell-in) 부진과 재고 관련 차질로 이어졌음을 인정했습니다.

회사는 투자 대상을 수가 적고 규모가 큰 이니셔티브에 집중하고 있습니다. '코티 큐레이티드(Coty.Curated)' 및 컨슈머 뷰티 중심의 '컬러 더 퓨처(Color the Future)' 프로그램을 통해 코티는 핵심 프랜차이즈, 점진적 혁신 확대, 그리고 장기적인 브랜드 가치(equity)를 뒷받침하는 광고에 우선순위를 두고 있습니다.

미국 시장에서 커버걸(CoverGirl)과 샐리한센(Sally Hansen)은 2026 회계연도 동안 시장과의 성과 격차를 대폭 줄였습니다. 샐리한센은 전국 단위 광고와 인스타드라이(Insta-Dri) 등 제품 라인업에 힘입어 금액 기준 시장 평균을 상회하는 성장을 기록했습니다. 커버걸은 심플리 에이지리스(Simply Ageless)와 래쉬블라스트(LashBlast)에 지출을 집중하며 전국 TV 광고를 재개했습니다.

경영진은 SKU 축소 프로그램을 통해 시간이 지남에 따라 반품과 진부화 비용이 줄어들 것으로 예상하고 있습니다. 판매 회전율이 높은 제품이 더 많은 진열 공간을 확보하는 반면, 비인기 제품은 봄·가을 유통업체 매장 개편 시 제거됩니다. 코티는 일부 영역에서는 진열 공간을 확보하고 일부 영역에서는 잃었지만, 전반적으로는 안정적으로 유지될 것이라고 밝혔습니다.

컨슈머 뷰티 프로그램은 이제 유럽으로 확대되고 있습니다. 코티는 영국 림멜(Rimmel)의 초기 성과 개선 사례를 언급하며 맨해튼(Manhattan), 맥스팩터(Max Factor), 부르주아(Bourjois)에도 유사한 조치를 적용할 계획이라고 밝혔습니다. 브라질 시장 역시 성장세로 돌아섰으며, 경영진은 해당 사업의 점유율 확대가 재개될 것으로 기대하고 있습니다.

프레스티지 부문에서 코티는 단순히 출시 초기 매출을 올리는 데 그치지 않고 전체 프랜차이즈를 확장하는 혁신을 추진하고 있습니다. 경영진은 남성용 프랜차이즈를 지원하는 동시에 여성용 라인업을 추가하도록 설계된 혁신의 예로 '보스 보틀드 비욘드(BOSS Bottled Beyond)'와 면세(Travel Retail) 채널에 출시된 '보스 비욘드 포 허(Boss Beyond for Her)'를 꼽았습니다.

면세(Travel Retail) 채널은 매출과 브랜드 홍보 모두에서 여전히 전략적으로 중요합니다. 경영진은 이 채널이 견조하게 성장하고 있으며 눈에 띄는 신제품 매대 진열, 매장 내 체험 프로그램, 뷰티 컨설턴트 지원을 제공한다고 언급했습니다.

경영진 가이던스

코티는 2027 회계연도를 전환의 해로 정의했습니다. 경영진은 1분기 흐름이 지난 2개 분기와 비슷할 것으로 예상하며, 실매출과 점유율이 혁신 및 절제된 비용 집행에 얼마나 빠르게 반응하느냐에 따라 분기별 개선 속도가 결정될 것으로 보고 있습니다.

회사는 2027 회계연도 EBITDA 및 잉여현금흐름을 2026 회계연도 수준에 가깝게 맞추는 것을 목표로 하고 있습니다. 추가적인 실적 상방 요인으로는 유가 관련 비용 감소, 약 3,000만 달러의 관세 환급금 수령, 추가적인 생산성 향상 또는 비용 절감 등이 있습니다.

2028 회계연도의 경우, 코티는 구찌를 제외한 기존 포트폴리오의 성장세를 회복시키는 것을 목표로 하고 있습니다. 경영진은 계획된 구조조정 프로그램만으로도 구찌 관련 매출 공백을 상쇄하도록 설계되었으며, 브랜드 성장이 추가적인 완화 역할을 할 것이라고 설명했습니다.

이번 구조조정은 코티의 시장 진출(go-to-market) 모델, 제조 및 유통 네트워크, 조직 체계, 본사 중앙 기능 전반을 다룰 것으로 예상됩니다. 세부 사항은 컨슈머 뷰티 부문의 전략적 검토와 관련된 연계 사안들이 해결된 이후 공개될 예정입니다.

리스크 및 관전 포인트

• 2027 회계연도 개선 속도는 코티가 소비자 실매출 성장을 회복하고 시장 점유율을 얼마나 빠르게 되찾느냐에 달려 있습니다.
• 회복세가 더딜 경우 실적 상방이 제한되고 더욱 엄격한 비용 관리가 요구될 수 있습니다.
• 약 3,000만 달러 규모의 관세 환급은 수령 시기와 가능성 모두 불확실합니다.
• 유가 변동은 회사의 계획 수립 틀에 반영된 2,000만~3,000만 달러 규모의 비용 충당금에 영향을 미칠 수 있습니다.
• 유럽 컨슈머 뷰티 이니셔티브는 미국보다 진행 단계가 낮아, 성공적인 이식이 중요한 실행력 시험대가 될 것입니다.
• 구찌 라이선스 종료는 2028 회계연도를 앞두고 상당한 매출 및 판관비 부담을 초래하므로, 영업 및 본사 기능 전반에 걸친 구조조정이 필요합니다.
• 컨슈머 뷰티 부문은 여전히 전략적 검토 단계에 있으며, 최종 구조나 거래 결과는 아직 결정되지 않았습니다.

애널리스트 Q&A 주요 내용

경영진은 개정된 인센티브 구조가 과도한 판촉 활동을 방지하도록 설계되었다고 밝혔습니다. 시장 점유율 지표는 매출 및 비중 있는 EBITDA 항목과 균형을 이루어, 수익성을 희생하면서 외형 물량을 축적하려는 유인을 제한합니다.

가격 정책과 관련해 코티는 10~12월 연말 연휴 기간 동안 프레스티지 부문에서 치열한 경쟁을 목격했으나 이후 다소 완화되었다고 전했습니다. 컨슈머 뷰티의 경우, 경영진은 기업들이 광범위한 가격 인상이나 인하보다는 더욱 정밀하게 타깃팅된 SKU 단위의 가격 조정을 시행할 것으로 전망합니다.

구찌와 관련해 코티는 케링(Kering)과의 계약을 통해 1년치 이익 및 현금에 상당하는 보상금, 부채 감축 및 구조조정을 지원할 자금, 그리고 재고 문제 해결 방안을 확보했다고 밝혔습니다. 코티는 줄어든 초기 매출 기반을 반영하여 판관비와 영업 네트워크의 규모를 재조정할 계획입니다.

컨슈머 뷰티 부문 검토와 관련해 경영진은 매각이 가장 쉬운 개별 자산의 처분을 우선시하기보다는 사업 전체를 평가하고 있다고 설명했습니다. 지속적인 브랜드 투자와 운영 개선은 검토의 최종 결과와 관계없이 가치를 창출하기 위한 목적입니다.

실적 발표회 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good morning and good afternoon, everyone. My name is Chelsea, and I'll be your conference operator today. At this time, I would like to welcome everyone to Coty's Fourth Quarter Fiscal 2026 Question-and-Answer Conference Call. As a reminder, this conference call is being recorded today, August 20, 2026, at 8:00 a.m. Eastern Time or 2:00 p.m. Central European Time. Please note that on August 19, at approximately 4:30 p.m. Eastern Time or 10:30 p.m. Central European Time, Coty issued a press release and prepared remarks webcast, which can be found on its Investor Relations website.

On today's call are Markus Strobel, Executive Chairman of the Board and Interim Chief Executive Officer; and Laurent Mercier, Chief Financial Officer.

I would like to remind you that many of the comments today may contain forward-looking statements. Please refer to Coty's earnings release and the reports filed with the SEC where the company lists factors that could cause actual results to differ materially from those forward-looking statements. In addition, except where noted, the discussion of Coty's financial results and Coty's expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the company's release.

With that, we will now open the line for questions.

Operator

[Operator Instructions] And our first question will come from Filippo Falorni with Citi.

질의응답

Filippo Falorni

So I wanted to ask a bit about fiscal '27. Obviously, you characterized it a transition year and the framework you provided in the prepared remarks was helpful. But I love to hear a bit more of your KPI internally that you're looking to achieve throughout this transition year. And maybe talk a little bit more about the potential sources of upside, both from a top line and profit standpoint and any risk that you see as you think about this transition year?

Markus Strobel

Okay. Yes, Filippo, you probably know that in the last couple of quarters, our sellout has been trailing below the category, okay? And obviously, that has led to lower sell-in and has led to all of the problems that we have. So our objective is to drive sell-out and to drive market share. This is new thinking for the organization. The organization was traditionally sell-in focused, and it takes some time to this adaptation. So we believe, as we outlined in the first quarter, probably see a similar trend that we have seen in the last 2 quarters, but then we want to sequentially improve that. We have some strong incremental innovation coming up. We have a more disciplined approach to spending. We focus on fewer bets. And we believe that this will, over time, decrease the sell-out gap versus the market.

Now the question is how long this will take? I cannot answer you that today. If this takes -- if this catches on faster, there will be upside. If this takes longer, then we better manage. And so far, we have tried to give a 50-50 balanced picture on that. But it all depends on how fast can we drive sellout, how fast can we drive market share. That's an important KPI for us. We have even changed all our bonus systems for fiscal '27, where market share sell-out is now a very important KPI and it has not been the case before. So we believe the whole organization will be focused on this, and we hopefully see some upside here. This is about sales.

And we talk about EBITDA, obviously, we're reducing the decline rate we have seen in the last 2 quarters. And is there upside? Yes, that depends on how the Middle East is going to shape up, how oil prices are going to shape up. We've built in $20 million, $30 million of costs for an oil price between $90 and $100. This is getting better, might be getting a little bit better. And also, we are still waiting for a potential tariff refund, which is about $30 million that comes or comes not depending when it comes, but there's an upside. And of course, we keep working on future productivity and cost savings effort on which we have delivered quite a good result in the last couple of years. So that's kind of my balanced view on this.

Operator

Our next question will come from Javier Escalante with Evercore ISI.

Javier Escalante Manzo

Laurent, thank you very much for all the help, you're going to be missed. I have 2 questions on the presentation. One, if you can talk about what's happened in EMEA, excluding the Middle East. I believe that most of it is consumer brands in Europe. But if you can talk about why there is no improvement there, that would be helpful. And particularly on the consumer side, if you can give us -- if you can walk us through what is the portfolio there beyond the core brands that you always talk about more kind of like the smaller brands, what's happening there?

And moving into the U.S. is the second question. You made some comments about SKU reduction and also there is some comments about capital spending related to marketing equipment. So if you can talk about whether that pertains to the U.S., what does it mean for CoverGirl? And if you can give us an update in terms of shelf reset heading into the fall?

Markus Strobel

Okay. Let me just unpack this. Javier, for your first question, the European -- more European brands versus the U.S. brands. I mean we have started our Color the Future performance improvement program in the consumer business in basically in January, and that's a version of Coty.Curated for consumer. And we have started this program in the U.S. So we have started all the interventions we have been making a simpler lineup, more powerful innovation, but fewer SKUs that we ship in and all these kind of things on -- since it's U.S., mostly on brands like CoverGirl and Sally Hansen. We see great traction. They have -- both brands have reduced the gap versus the market substantially over the year. And Sally Hansen is now even growing ahead of the market even in value. So we have been positively surprised by how quickly the interventions take on.

We also believe these interventions will help our EBITDA over time because part of our EBITDA decline on Consumer Beauty is returns, obsolescence because you get -- when the innovation is not selling, you get it back in the U.S. trade. And if you're selling less, more powerful things and we have fewer SKUs on the shelf that are turning much more quickly, we're going to have less excess and obsolescence as we move along. So this is a very big part of our EBITDA building plan in Consumer Beauty.

So having said that, we started this program in the U.S. and now we are rolling it out to the rest of Europe, the last country is the U.K. where some good traction now on Rimmel, especially in the last month where Rimmel is catching up with the category finally. And as a final step, in the next few weeks or months, we're going to roll this out to our mostly European brands. These are brands like Max Factor and Gua Sha that are mostly prevalent in Central Europe and in parts of Western Europe. And we have not implemented these interventions there yet, but they are about to come. So I'm expecting that we're going to see some improvements there as well.

Coming back to the SKUs and the CapEx, you know that CapEx in makeup in cosmetics is very expensive. So we're going to be -- we've done a lot of improvements with procurement and in the work with our vendors to have great quality installations, but at a lower price. So our CapEx is going down. And we will -- when we look at the 20% SKU reduction on shelves, we don't believe this is going to have any material impact on our sales. On the contrary, that's going to leave the space for the fast turning SKUs because in the past, with an innovation not working, you put in a slow turner and the fast turner goes out of the shelf. It doesn't make much sense. So we're very, very deliberate about that. So we believe we're going to see a continuous uptick in our consumer business over the next couple of months.

Javier Escalante Manzo

But just to double-click, if you can comment on the shelf resets getting into the fall. Do you think that the phasing -- the total phasing to the consumer in the U.S. for CoverGirl and Sally Hansen is going to held up? Or how is it going to change? And then the color on Europe was interesting, but I'm more interested in the brands that you don't talk about. Like you used to have brands at least that I remember, something called ASTOR, Manhattan. The brands -- what is happening to them?

Laurent Mercier

I'm happily talking about them. I'll come back to your first question in a second. Happily talking about ASTOR -- ASTOR?

Javier Escalante Manzo

The brands that are not -- that you rarely talk about.

Markus Strobel

Manhattan -- Manhattan is basically the equivalent of Rimmel in Germany, okay? It's the same portfolio that's just called the Rimmel brand in Germany. Manhattan has it's historical reasons. And in Europe and again, Manhattan, Max Factor, Bourjois are all brands on which we're going to bring the interventions now. We haven't done it on these brands in Europe yet, okay? But it's coming. So we hopefully can replicate the U.S. success model.

When it comes to shelf space and shelf resets, we have mostly managed to have stable shelf space. Shelf space is always under threat. If you sell out, it's not great. But the improvements we have seen in Q4, this is the time when shelf space is being decided. We have lost a bit. We have gained a bit. But overall, we should be stable. So we don't see a big risk from losing shelf space or anything like this for the time being.

Operator

Our next question will come from Anna Lizzul with Bank of America.

Anna Lizzul

I was wondering if you could comment on the promotional environment here. You mentioned in fiscal '26 that had been elevated throughout the year. And just wondering as well in terms of competitors' actions here, we've seen some pricing reductions being taken and then pricing being elevated again. I'm curious for your take on some of the competitor actions in the Mass side in particular.

Markus Strobel

Yes. On pricing, things are going a little bit back and forth. We have seen -- in the Prestige, we have seen a lot of pricing competition in the key holiday season from October to December, but this has abated a bit ever since then, which actually is good. And in consumer, I think what all the companies are doing now we've been doing, okay, what are the -- instead of going up in price or down or being broad-based, but being much more surgical, okay? What type of businesses, what type of SKU can I support a higher price and what kind of SKUs I cannot support a higher price, right? So that differentiation is, I think, going to help us stabilize this pricing and promotion environment a little bit in the next couple of months.

Anna Lizzul

Great. And then in terms of your strategic review for the Consumer Beauty business by the end of calendar '26, is that really a hard deadline? Is that something you're working towards that there's room to see if there's maybe not an agreement made by that time? Curious on just how flexible you are there.

Markus Strobel

I know I'm sticking my neck out on this 2026 thing. So it's our very, very, very strong aspiration to get it done by then. I mean, at the end of the day, if the results are 10x better, if we have another month, then yes, of course, we would do that. But it's our intent to finish this by calendar '26.

Operator

Our next question will come from Susan Anderson with Canaccord Genuity.

Susan Anderson

I guess maybe just to dig in a little deeper on the Consumer Beauty business, particularly the improvement you saw in the U.S. with CoverGirl and Sally Hansen. I guess I'm just curious, is that being driven by the better marketing, sharper price points? Are you guys being more promotional there? Or is it new innovation? I guess maybe just a little bit of color on what's driving that? And then just the performance internationally versus the U.S.

Markus Strobel

Yes. So I think it's actually on the contrary, it's less driven by promotions. It's more driven by actually building advertising because on brands like CoverGirl or Sally Hansen, we have been in and out of advertising over the years. But we have made a choice to concentrate our funds in really actively building advertising. We are back on television with CoverGirl mentioned that we are targeting Gen X, Gen X still watches television quite a lot. So we're back nationally on air, and we are focusing our efforts on our 2 biggest franchises, which is Simply Ageless and LashBlast really focusing on the core.

And on CoverGirl has really helped us dramatically to improve the gap -- the sellout gap versus the category, and we're getting now very close. Same thing on Sally Hansen. We're back on national advertising on Sally Hansen in the nail care category, coupled with some very good innovation like our Insta-Dri innovation has found an extremely good reception.

So if I have to sum it up, I think where we're going with Coty.Curated and Color the Future is much more putting the money where we have a return and where we also have long-term equity building to drive our brands and drive our core franchises versus competing everywhere and in every SKU and so on and so on and so on. I would say focus and focused spending.

Susan Anderson

Okay. And then just the performance internationally versus the U.S. because I think you noted that Mass body and skin care helped to drive the growth. So I guess, was that the Brazilian business as well?

Laurent Mercier

Yes. Yes. I mean Brazil is also back to growth, which is where the skin care part comes from. So Brazil is a bit of a wobble at the beginning of the year, but they're doing well now. They're back. The market is growing. We are growing, and we are about to grow share again in Brazil. So that's going in the right direction. And again, Europe, I think I have mentioned in the question before, where we are not as far advanced yet in the implementation as we were in the U.S., but we see the U.S. working. And obviously, we're going to replicate this in Europe. And good initial response on Rimmel in the U.K.

Operator

Our next question will come from Steve Powers with Deutsche Bank.

Stephen Robert Powers

Markus, I wanted to ask on -- you explicitly stated the goal of returning the underlying portfolio, excluding Gucci to growth in fiscal '28. There are a lot of balls in the air as you think about fiscal '27. But I guess I just wanted to get a better sense of your confidence around that goal. And I guess the key building blocks, the most critical assumptions or the things that we should be looking for to develop over the course of '27 to be able to hit that target.

Markus Strobel

Yes. I think that Steve 2 or 3 points that are extremely important. One of them is for us really the focus on our big brand franchises, okay, and the role that every brand franchise plays in our portfolio. For example, our big global brands, Burberry, Hugo Boss, there's no excuse if you don't grow. So we've got to make these products grow. And for us, one of the most important things apart from focusing and spending the money of them, is to create more incremental innovation that creates a halo effect on the total business. We have not done that successfully last year because our innovation has been performing well, but it was not incremental enough. It didn't create a halo.

I'll give you one example on Hugo Boss that we had a very good launch with BOSS Bottled Beyond. I mean, one of the top 2 male launches of the year, doing very well, building share in the U.S., but it hasn't driven up the total franchise. What we're just in the process of doing, we have just launched starting in Travel Retail, Boss Beyond for Her -- women, right? So we are creating a female business for Hugo Boss, which obviously by definition is going to be incremental. And we have constructed in a way and tested it and confirmed it in a way that every dollar that we spend on the female campaign has a halo effect on the male campaign as well. So that's kind of what we're trying -- the way we look at our big brands and our innovation to construct innovation for better for incrementality and also better for the total halo effect.

And then playing our portfolio where the strengths are, again, big global brands and then we have probably more regional brands at the moment in Marc Jacobs, where we are very strong in English-speaking countries, U.S., U.K., even Australia, where we have actually double-digit fragrance growth in the last 6 months. And now we're bringing the makeup, cosmetics line on top but we are concentrating it on the markets where we can win with this proposition. So it's all about focused investment, having a right to win and incremental innovation that creates a halo effect.

Stephen Robert Powers

Yes. Very good. Okay. If I could ask a follow-up. You mentioned efforts underway to develop plans to moderate the sales and profit impacts as we look to fiscal '28 from the Gucci departure. I guess how much of that planning is dependent on the rest of the portfolio resuming growth, as we just talked about versus you being able to actually restructure some costs specifically to mitigate the financial impact through restructuring? How much is growth-oriented versus cost out, if that makes sense?

Markus Strobel

Yes. What we're trying to do, I mean, I think we -- on this one, we are trying to go with belt and suspenders, okay? So we're going to grow these brands. That's a big part of the building blocks. And we're also bringing new brands like Swarovski [ HO ] next year. But our cost savings program, restructuring program alone can get the gap. That is our intention, okay? Because if we achieve that and we bring the growth on top of our big global brands, I think then we're going to be in very good shape, right? So it's a belt and suspenders approach. And hopefully, all these activities are going to add up to more than what we need because in the end, we always get a little bit less and then it's going to be good. So that's our approach. And you will hear more about our restructuring program in the next few months because we're also still working on the study for the consumer business, there are a lot of independencies. So we just want to come to the market once and say this is, this is what we're going to do, and then it's execution.

Operator

Our next question will come from Olivia Tong with Raymond James.

Olivia Tong Cheang

I'm not sure how much you can share, but can you give us an update on the strategic review of Consumer Beauty that you expect to be done by calendar year-end? In the past, you had flagged that Brazil would be a cleaner exit potentially versus the U.S. business. So just a little bit of more color there would be great.

Markus Strobel

Yes, it's very ring-fenced and it would be easier in isolation, but we are not looking for necessarily the team and easy looking for the best solution that creates the most value for us. So we keep working on the future review as a total, including everything in consumer.

Olivia Tong Cheang

Got it. And then you just mentioned to Steve about the plan to -- with respect to Gucci and absorbing the incremental costs and how you will look at cost overall. But now that we know that it's a low double-digit percentage of sales with healthy profit, can you give us a sense on some of the specific actions you're going to take to minimize the overhead challenges. Presumably, some of that cost may go to L'Oreal, but maybe not very much. And I understand that you'll be satisfying the inventory for a period of time. But just given that they probably don't need a ton of handholding in this category beyond the initial inventory, what can be done?

Markus Strobel

Yes, I would imagine they're not -- they don't take too much handholding. You probably got that right. But I think, first of all, we are super happy with the deals we made with Kering because it was our objective. And we did it in our terms. It was really our objective to get the full compensation of a year of profit and cash. We wanted to get funds that help us to pay down debt, and we wanted to get some money that help us with the restructuring plus you want to solve the inventory question. So all of these things have been addressed. So that's why we're happy with that deal.

When it comes to our fixed cost savings, there's obviously quite a chunk of money in allocated overhead, okay? Because the way you have to look at the business is that we have -- in Prestige, we have a scaled R&D organization. We have a scaled manufacturing, distribution organization. And we also have our central VP, all the corporate functions, they're all working for Prestige. So with the brand in the low double digit teens, that's quite a sizable money. So we are looking at a very serious restructuring program that will encompass our go-to-market setup, manufacturing and distribution network a continuous delayering of the organization, which we have started anyway to get to faster decision-making and more agility and of course, also a rightsizing of our central organization to reflect initially lower sales.

Operator

Our next question will come from Sydney Wagner with Jefferies.

Sydney Wagner

So you've now built market share into the fiscal '27 incentive structure to help reinforce the sell-out culture. How are you thinking about making sure that doesn't inadvertently encourage chasing volume promotionally in a market that's already quite competitive. Just curious what guardrails you have in place so the comp structure and the margin discipline stay aligned?

Markus Strobel

Yes. No, I mean, our total bonus structure, which I'm not going to go into the details, probably taking half an hour to explain this, is -- has market share as a big KPI, but there's also a sales component and there's an EBITDA component. There's a very, very strong EBITDA component. So we cannot just really, really do promotion to increase sales, it comes at the expense of profit, right? So I think the way it is calibrated, I think then we have done a decent job to put the guardrails already into the design of the program. And while we believe this is superior is you just focus on sales, especially then end of the year, end of the quarter and people are starting selling stuff in that doesn't sell out, then you get exactly to these wide swings in inventory that we want to avoid. We want to have sell-out growth, but sellout growth then pretty much in line to with sell-in so that we get out of these inventory swings.

Operator

Our next question will come from Andrea Teixeira with JPMorgan.

Andrea Teixeira

So Laurent, I want to expand also my gratitude and wish you well. We -- so just thinking of what you discussed about the Consumer Beauty brands, I was like you obviously said that you want to maximize returns and make bigger bets. But you also mentioned that some of the European brands you want to also reinvest like Bourjois, I think you mentioned Manhattan and [indiscernible], if I'm not mistaken. But just to make sure that we understand and layering that with that strategic review for Consumer Beauty in the middle of this kind of promotional environment. So I was just wondering how to think through the end of the calendar year, which is your first half, how we should be thinking of that improvement? And in terms of like I believe you mentioned the number of SKUs that you're going to be taking out. Is that something you implement? And what is the time line for that?

Markus Strobel

No, I think -- here we go. Again, when we look at the investment profile and how we're running this, again, U.S., we are investing into advertising, equity building. We intend to do this in Europe as well. But again, we are behind in Europe. And this is -- no matter what the outcome of the strategic review is, this is the right thing to do. So this is the way we create value. We have a better business. We create value for our us so we create value for somebody else, and that value will be reflected at one point in time. So what we're doing, I think, is spot on and it's going to put us in a better position in any scenario. When it comes to the SKUs, it's basically part of the shelf resets that happen in spring and in fall. That's when we're going to be executing this in the next few months.

Andrea Teixeira

You quantified that's helpful. Because I mean, to be fair, this is happening for the last decade, right? I mean this has been always -- and this is natural for a lot of the CPGs, in particular in beauty, you're going to always have to take down as you layer innovation. What is this now? And what is the actual percentage of SKUs that you're taking out and how much you're losing shelf space? I'm assuming that comes at a cost of losing shelf space.

Markus Strobel

I think it's -- this is not necessarily directly related. It can be a time, but it doesn't have to because at the end of the day, every retailer is also interested to have on the shelf of high-volume SKUs. So if you take a slow-moving SKU out and then suddenly you negotiate for 2 facings on the fast-moving SKU, this helps everybody, helps the manufacturer and helps the retailer. So it's a very detailed fine-tuned discussion retailer by retailer, almost like store by store to have the right assortment for the retailer and have the right assortment for the store because what you want to see is turns on the shelf, right? And products that don't turn are not helpful for anybody.

Operator

We have one more question in the queue. This is one from Oliver Chen with TD Cowen.

Julia Shelanski

This is Julia Shelanski on for Oliver Chen. I'm curious as you think about the upcoming innovation calendar, how important is the ongoing recovery in Travel Retail versus realizing the full potential of those launches in terms of -- versus what you're seeing in domestic and specialty channels?

Markus Strobel

Can you just say that again because I just had a very bad connection for a second here. I just come to the other side of the table to the microphone. Could you ask the question again? I'm sorry.

Julia Shelanski

Yes, apologies. As you think about the upcoming innovation calendar, how important is the recovery in travel retail to realizing the potential of those launches versus what you're seeing in domestic and specialty channels?

Markus Strobel

I think Travel Retail is an important channel for us because Travel Retail is not only there to create sales, Travel Retail is there to create the image. So that's why we have -- like I told you an example with BOSS for Her, we started in Travel Retail because you can get amazing space and the travel retailers see their stores, especially in the airports more as drawing consumers. In the past, when things in the airports were cheaper than domestic, people went in there for the price. That's no longer the case. Now they go in there for the entertainment, for the in-store presence for what's happening in the store.

So if you come with launches in Travel Retail, you can get amazing placement because you have the retailer to stop the travelers and get them into the store. In return, it gives you a very good image because you don't have 2 or 3 SKUs on the shelf. You have a big display or a very nice stand with beauty consultants and so on and so on. So I think Travel Retail for us is important and Travel Retail for us is actually growing nicely.

Operator

We've now reached our allotted time for questions. So I'd like to turn the call back over to our speakers for any additional or closing remarks.

Markus Strobel

Yes. Before we wrap this up, let me just reiterate a few points. And I -- just be very clear. I mean, we had good improvements this quarter, but we're obviously not satisfied at all with our current level of performance, but we know what it takes to make it better. We have strong brands, leading positions in attractive categories and a clear framework to strengthen execution. While we've given guidance for Q1 only, we are targeting to deliver fiscal year '27 EBITDA and free cash flow close to fiscal '26 levels. Our priorities are straightforward: improve the sellout, close the gap to market, strengthen profitability. We are implementing the changes needed to achieve those objectives and we will continue to act with focus and urgency.

Thank you for your continued interest in Coty, and thank you for joining us today. Have a great rest of your day.

Operator

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation, and you may now disconnect.