Coty Inc. (NYSE:COTY) shares dropped more than 21% on Thursday after the beauty company posted a surprise fourth-quarter loss and warned of sales and profit declines in the first half of fiscal 2026 before a recovery later in the year.
The company reported a loss of 5 cents per share, compared with analyst expectations for a 2 cent profit. Revenue rose to $1.25 billion from $1.21 billion a year earlier, slightly above forecasts of $1.21 billion. Adjusted EBITDA reached $127 million, missing consensus estimates of $131 million. Adjusted operating income came in at $68 million, well short of the $98 million projected by Barclays.
For fiscal 2026, Coty said it expects like-for-like sales to decline 6% to 8% in the first quarter and 3% to 5% in the second, citing cautious retailer orders, tariffs, and a more promotional environment. A return to growth is expected in the second half, supported by fragrance launches, geographic expansion, and easier year-over-year comparisons.
The company forecast adjusted EPS of $0.33 to $0.36 for the first half, representing a high single to mid-teen percentage decline from last year. Adjusted EBITDA is projected to fall by double digits in the first two quarters before rebounding later in the fiscal year.
