Coty tanks 21% after surprise quarterly loss, warns of weak first half

Investing.com -- Coty (NYSE:COTY) shares tanked more than 21% in premarket trading Thursday after the company reported a surprise quarterly loss and said it expects sales and profit to decline in the first half (1H)of its new fiscal year (F26) before returning to growth.

The CoverGirl and Gucci fragrances owner posted a fourth-quarter loss of 5 cents per share, compared with analysts’ average estimate of a 2 cent profit.

Revenue rose to $1.25 billion from $1.21 billion a year earlier, above forecasts of $1.21 billion.

Coty reported an adjusted EBITDA of $127 million, which compares to the consensus $131 million.

Adjusted operating income (EBIT) came in at $68 million, well below the $98 million expected by Barclays analysts.

"Coty’s F4Q25 sales decline was spot in-line with our estimate, at the upper end of management’s expected sales decline (high single digit), but the bigger headline for us is the stark EBIT shortfall, stemming both from weaker gross margins and higher SG&A," the analysts said in a note.

Looking ahead, Coty said it expects like-for-like sales to fall 6% to 8% in the first quarter of fiscal 2026 and 3% to 5% in the second, pressured by cautious retailer orders, tariffs and a more promotional environment.

It expects a return to growth in the second half as new fragrance launches, geographic expansion and easier comparisons take effect.

The company also forecast adjusted earnings per share of 33 to 36 cents for the first half, down by a high single to mid-teen percentage year on year. It expects adjusted EBITDA to decline in double digits in the first two quarters before rebounding later in the year.

"With F1H26 LFL sales and Adjusted EBITDA declines expected to be far worse than our already below-Consensus estimates, this implies a far steeper hill to climb in F2H26," Barclays analysts continued.

(Pratyush Thakur contributed to this report.)