Coty outlines FY2027 reset as sales recover but profitability declines

Coty has released its Q4 2026 financials, showing mixed results. Sales returned to growth, while profitability took a hit from lower volumes, supply-chain costs, and tariffs.

The global beauty conglomerate reports 1% year-on-year sales growth in Q4. Its Coty.Curated framework aimed at strengthening its core Prestige and Consumer Beauty business.

“We were pleased to return to reported sales growth, with Q4 sales up 1% year-over-year and a significant sequential improvement in our like-for-like (LFL) trends to down 1%, despite incurring an estimated 1% headwind to sales from the Middle East conflict,” says Markus Strobel, executive chairman and interim CEO.

“However, we are not content with our sell-out performance, which remains below market levels in both divisions, and steadily closing that gap remains a clear priority across the organization.”

For FY2026, adjusted gross margin fell 190 basis points to 63.0%, while Q1 adjusted EBITDA margin dropped to 14.6% from 18.4% in the prior year.

Operating cash flow remained strong despite floundering profitability. Coty reported an increase from US$492.6 million to US$537.8 million and free cash flow from US$277.6 million to US$348.2 million.

The company also reports regional improvements in the Americas and Asia Pacific. The former’s sales rose 9% reported and 6% LFL. Asia Pacific increased 11% reported and 7% LFL, boosted by strong performances in China, Southeast Asia, Australia and New Zealand, and travel retail.

EMEA, however, fell 8% reported and 10% LFL amid lower sales in the Middle East, Germany, and Central and Eastern Europe.

Coty.Curated in 2027

Coty is positioning FY2027 as a transition year under its Coty.Curated strategy.

Coty is positioning FY2027 as a transition year as it advances the early-stage implementation of Coty.Curated and completes its strategic review. For Q1 2027, it expects LFL revenue to decline by a low- to mid-single-digit percentage and a decline of 50–100 basis points in its adjusted gross margin. The company expects that adjusted EBITDA will fall by a low-teens percentage while H1 FY2027 free cash flow is expected to come in at over US$300 million.

“We began rightsizing our commercial organization and Consumer Beauty R&D and global brand marketing functions to enhance agility and accountability. We have also incorporated concrete market share targets into our global incentive program,” says Strobel.

“Our FY27 big bets have been identified, and we will support them with amplified advocacy and consumer engagement programs, while also optimizing the visibility and recommendation of our brands across AI platforms. In Consumer Beauty color cosmetics, we are simplifying the innovation calendar and SKU base, and shifting resources toward fewer, higher-impact launches and proven hero products. We will execute these actions with discipline to minimize the impact on sales.”

Over the past three quarters, Coty has been simplifying its broader portfolio, sharpening its focus on its core business, and reducing its debt balance. In December 2025, Coty monetized its remaining stake in Wella for US$750 million.

Last month, Coty revealed that the Gucci Beauty license will return to Kering for approximately US$400 million, plus additional proceeds from inventory. Kering Beauté was acquired by L’Oréal on March 31, 2026.

“These favorable outcomes are fully consistent with our objectives, as we deploy the proceeds toward debt reduction, reinvestment in Coty’s core prestige fragrance and beauty brands, and optimization of our organizational structure,” says Strobel.