Coty Inc. shares fell 7.9% in extended trading on Thursday after the beauty group posted mixed fourth-quarter results and issued cautious guidance for the current quarter, despite beating revenue expectations.
The New York-based company reported a fourth-quarter adjusted loss of 2 cents per share, wider than the expected loss of 1 cent, while revenue rose 1% year-over-year to $1.27 billion, exceeding the consensus estimate of $1.19 billion. The stock had gained 10.58% during the regular session but reversed course following the release.
For the full fiscal year ended June 30, 2026, Coty’s revenue declined 2% to $5.81 billion from $5.89 billion a year earlier. Free cash flow increased 26% to $348.2 million, up from $277.6 million in the prior year. The company estimated a 1% revenue headwind from the Middle East conflict during the quarter.
Adjusted gross margin contracted by 140 basis points to 60.9% due to lower cost absorption, higher excess and obsolescence charges, and tariff effects. Adjusted operating income fell 42% to $39.5 million from $67.7 million in the year-ago period.
The Prestige segment, which accounts for 61% of total sales, reported a 1% revenue increase to $771.8 million but a 0.5% like-for-like decline. The Consumer Beauty segment saw a 1% rise in revenue to $497.4 million, though like-for-like sales fell 3%.
Looking ahead, Coty guided for a low- to mid-single-digit percentage decline in like-for-like revenue for the first quarter of fiscal 2027. Adjusted EBITDA is projected to decrease by a low-teens percentage, while adjusted earnings per share are expected to range from $0.11 to $0.13, excluding equity swap impacts.
Markus Strobel, Executive Chairman and Interim Chief Executive Officer, noted that the company closed the fiscal year on a stronger note, delivering sales and profit ahead of targets while growing free cash flow amid business headwinds.
