Coty Q3 revenue edges past estimates; warns of likely Q4 adj EPS loss

Overview

• US beauty products maker's Q3 revenue slightly beat analyst expectations despite 1% yr/yr decline

• Adjusted EPS for Q3 missed analyst expectations

• Q3 adjusted EBITDA and adjusted operating income both beat analyst expectations

Outlook

• Coty expects Q4 FY26 like-for-like revenue to decline by a mid-single-digit percentage

• Company anticipates Q4 FY26 adjusted EBITDA of $85 mln to $95 mln and adjusted EPS of breakeven to a loss of $0.02

• Coty sees FY26 adjusted EBITDA of $838 mln to $848 mln and adjusted EPS of $0.33 to $0.35

Result Drivers

• MIDDLE EAST DISRUPTION - Co said conflict in the Middle East weighed on sales, especially in EMEA, with an estimated 1.4% headwind to total Q3 revenue

• COST CONTROL & INVESTMENT SHIFT - Profitability ahead of its guidance was supported by tight cost control and shifting some investments to Q4, per management

• GROSS MARGIN PRESSURE - Gross margin declined due to supply chain cost under absorption, excess & obsolescence in Consumer Beauty, and higher tariffs

Company press release: ID:nBw6dcfMya

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 14 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the personal products peer group is "hold"

• Wall Street's median 12-month price target for Coty Inc is $2.50, about 3.3% above its May 4 closing price of $2.42

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 7 three months ago

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