Coty Reports Q2 Results: Net Debt Reduced to Lowest Level in Nearly a Decade
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 05 2026
0mins
Should l Buy COTY?
Source: Businesswire
- Financial Performance Overview: Coty reported net revenues of $1.678 billion for Q2 FY2026, reflecting a 1% year-over-year increase, yet the adjusted net income showed a significant loss of $126.9 million attributable to common shareholders, indicating pressure in market competition.
- Debt Management Success: As of December 31, 2025, Coty's total debt stood at $3.038 billion with financial net debt at $2.601 billion, resulting in a financial leverage ratio of 2.7x, showcasing the company's proactive efforts in reducing liabilities, which enhances future financial flexibility.
- Strategic Framework Launch: Coty initiated its “Coty. Curated.” strategic framework aimed at improving performance through sharper investments and execution, expected to bolster market share in core business areas, particularly in key markets like the U.S., U.K., and Germany.
- Future Outlook Adjustment: Due to a complex market backdrop, Coty has withdrawn its prior FY2026 guidance for EBITDA and free cash flow, anticipating a mid-single-digit percentage decline in Q3 revenues primarily driven by weakening trends in Consumer Beauty sales.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy COTY?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on COTY
Wall Street analysts forecast COTY stock price to rise
12 Analyst Rating
1 Buy
9 Hold
2 Sell
Hold
Current: 2.500
Low
2.50
Averages
4.30
High
10.00
Current: 2.500
Low
2.50
Averages
4.30
High
10.00
About COTY
Coty Inc. is a beauty company with a portfolio of brands across fragrance, color cosmetics, and skin and body care. The Company has a diverse portfolio of brands, which includes both owned and licensed. Its brand portfolio is classified into two segments: Consumer beauty and Prestige. The consumer beauty brands include Adidas, Beckham, Bozzano, Bourjois, Bruno Banani, CoverGirl, Jovan, Mexx, LeGer by Lena Gercke, Monange, Nautica, Paixao, Rimmel, Risque, Sally Hansen, and Vera Wang. Its prestige brands include Burberry, Calvin Klein, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Kylie Cosmetics by Kylie Jenner, Lancaster, Marc Jacobs, Miu Miu, Orveda, and Tiffany & Co. Its mass beauty brands are primarily sold through hypermarkets, supermarkets, drug stores and pharmacies, mid-tier department stores, traditional food and drug retailers, and dedicated e-commerce retailers. It markets, sells and distributes its products in over 120 countries and territories.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Oversold Stocks in Consumer Staples Present Buying Opportunities
- Oversold Stocks Overview: According to Benzinga Pro, major players in the consumer staples sector, including NU Skin Enterprises Inc, Coty Inc, and Honest Company Inc, have relative strength indices (RSI) near or below 30, indicating they are significantly oversold and may present undervalued buying opportunities for investors.
- RSI Indicator Analysis: The relative strength index (RSI) serves as a momentum indicator that compares a stock's strength on up days versus down days, helping traders better assess short-term stock performance and make more informed investment decisions amid market fluctuations.
- Market Opportunity Identification: The identification of oversold stocks in the current market environment offers potential appreciation opportunities for investors, particularly in the consumer staples sector, where investors can capitalize on the rebound potential of these undervalued stocks.
- Investment Strategy Recommendations: While Benzinga does not provide investment advice, the phenomenon of oversold stocks typically attracts value-seeking traders, suggesting a focus on the subsequent performance of these stocks to evaluate their rebound potential.
See More
Market Update: S&P 500 Declines and Upcoming CPI Data
- CPI Expectations: The consumer price index, set to be released at 8:30 a.m. ET on Friday, is expected to show a month-over-month increase of 0.3% and a year-over-year rise of 2.5%, which could significantly influence market sentiment and lead investors to reassess their risk appetite.
- Moderna Stock Fluctuations: Moderna's shares have surged 50% over the past three months, closing at $40.11 on Thursday, although this remains significantly lower than the pandemic peak of $497, indicating ongoing volatility in biotech stocks that investors are closely monitoring.
- Wendy's Stock Decline: Wendy's shares fell 7.7% on Thursday, down 55% from their 52-week high, highlighting the persistent pressures facing the fast-food industry, which may impact its future market performance.
- Retail Sector Dynamics: The Amplify Online Retail ETF dropped nearly 4% on Thursday, now down 19.5% from its September high, reflecting weakness in the retail market, especially after experiencing five consecutive weeks of declines, which could negatively affect overall consumer confidence.
See More
2016 Nostalgia Sparks Retail Revival Potential
- Social Media Surge: Since January 1, user-generated '2016' playlists on Spotify have surged by 790%, indicating a strong nostalgic sentiment among young consumers that could drive sales for brands associated with that era.
- Return to Brick-and-Mortar: Young consumers are rediscovering the joy of in-store shopping, reflecting a longing for the carefree atmosphere of 2016, which may lead to improved performance for retailers.
- Brand Opportunities: Brands like Abercrombie & Fitch could leverage this nostalgia wave to reshape their image, particularly if they successfully distance themselves from past controversies, potentially attracting more young consumers.
- Market Outlook: Retail trends typically last about 18 months, and this nostalgia cycle is expected to persist through the midterm elections this year, possibly extending into next year, providing long-term market opportunities for related brands.
See More
Gen Z's Nostalgia for 2016 and Its Impact on Retail
- Nostalgia Trend Emergence: Gen Z's nostalgia for 2016 has rapidly spread across social media, with Spotify user-generated '2016' playlists soaring by 790% since January 1, indicating a strong yearning for the cultural elements of that time, potentially driving a revival for related brands.
- Return to Brick-and-Mortar: Young consumers are rediscovering the appeal of in-store shopping after years dominated by e-commerce, reflecting a longing for the carefree and familiar comfort of 2016, which could stimulate a retail resurgence.
- Brand Opportunities Arise: Brands like Abercrombie & Fitch and Levi Strauss, which held significant cultural relevance in 2016, may leverage this nostalgia wave to regain market traction, especially as consumers show renewed interest in classic styles.
- Market Strategy Adjustments: As nostalgia rises, brands must adjust their market strategies to align with Gen Z's desire for authenticity and less intentionality, with successful brands likely to harness this emotional connection to reshape their cultural relevance.
See More
Molina Healthcare Stock Plummets 29% After Earnings Miss
- Unexpected Quarterly Loss: Molina Healthcare reported an unexpected quarterly loss, causing its stock to plummet 29% in a single day, marking the largest drop since 2012 and indicating significant challenges in profitability.
- Weak 2026 Outlook: The company issued a weak earnings outlook for 2026, which may undermine investor confidence and further pressure the stock price, reflecting market concerns about its future growth potential.
- Strong Overall Market Performance: Despite Molina Healthcare's stock decline, the Dow Jones Industrial Average surged nearly 2% on Friday, reaching a new all-time high, indicating a market preference for value stocks that may overshadow individual stock weaknesses.
- Small Caps Outperform: Small caps showed outstanding performance on Friday, with the Russell 2000 index soaring over 3%, suggesting increased investor confidence in smaller companies, contrasting sharply with Molina's performance.
See More
Coty Inc. Q2 2026 Earnings Call Insights
- Brand Focus Strategy: Coty Executive Chairman Markus Strobel emphasized a renewed focus on core brands like CoverGirl and Rimmel, noting that while sales declines have improved from high single digits to low single digits, the company still faces significant challenges in revitalizing these brands.
- Innovation Strategy Shift: The company plans to transition from large product bundles to streamlined SKU management, which will initially reduce pipeline fill in Q3 but is expected to improve sell-out velocity over time, thereby enhancing overall operational efficiency.
- Digital Marketing Investment: Coty is reallocating resources to focus on digital marketing and AI asset creation, with expectations of achieving a 70% to 80% cost reduction, which will help enhance brand competitiveness and optimize marketing strategies.
- Cautious Financial Outlook: Management anticipates a mid-single-digit sales decline in Q3, primarily driven by Consumer Beauty, and while there are expectations for profit recovery in the upcoming fiscal year, short-term challenges remain due to ongoing gross margin pressures and competitive market dynamics.
See More
Oversold Stocks in Consumer Staples Present Buying Opportunities
- Oversold Stocks Overview: According to Benzinga Pro, major players in the consumer staples sector, including NU Skin Enterprises Inc, Coty Inc, and Honest Company Inc, have relative strength indices (RSI) near or below 30, indicating they are significantly oversold and may present undervalued buying opportunities for investors.
- RSI Indicator Analysis: The relative strength index (RSI) serves as a momentum indicator that compares a stock's strength on up days versus down days, helping traders better assess short-term stock performance and make more informed investment decisions amid market fluctuations.
- Market Opportunity Identification: The identification of oversold stocks in the current market environment offers potential appreciation opportunities for investors, particularly in the consumer staples sector, where investors can capitalize on the rebound potential of these undervalued stocks.
- Investment Strategy Recommendations: While Benzinga does not provide investment advice, the phenomenon of oversold stocks typically attracts value-seeking traders, suggesting a focus on the subsequent performance of these stocks to evaluate their rebound potential.
See More
Market Update: S&P 500 Declines and Upcoming CPI Data
- CPI Expectations: The consumer price index, set to be released at 8:30 a.m. ET on Friday, is expected to show a month-over-month increase of 0.3% and a year-over-year rise of 2.5%, which could significantly influence market sentiment and lead investors to reassess their risk appetite.
- Moderna Stock Fluctuations: Moderna's shares have surged 50% over the past three months, closing at $40.11 on Thursday, although this remains significantly lower than the pandemic peak of $497, indicating ongoing volatility in biotech stocks that investors are closely monitoring.
- Wendy's Stock Decline: Wendy's shares fell 7.7% on Thursday, down 55% from their 52-week high, highlighting the persistent pressures facing the fast-food industry, which may impact its future market performance.
- Retail Sector Dynamics: The Amplify Online Retail ETF dropped nearly 4% on Thursday, now down 19.5% from its September high, reflecting weakness in the retail market, especially after experiencing five consecutive weeks of declines, which could negatively affect overall consumer confidence.
See More
2016 Nostalgia Sparks Retail Revival Potential
- Social Media Surge: Since January 1, user-generated '2016' playlists on Spotify have surged by 790%, indicating a strong nostalgic sentiment among young consumers that could drive sales for brands associated with that era.
- Return to Brick-and-Mortar: Young consumers are rediscovering the joy of in-store shopping, reflecting a longing for the carefree atmosphere of 2016, which may lead to improved performance for retailers.
- Brand Opportunities: Brands like Abercrombie & Fitch could leverage this nostalgia wave to reshape their image, particularly if they successfully distance themselves from past controversies, potentially attracting more young consumers.
- Market Outlook: Retail trends typically last about 18 months, and this nostalgia cycle is expected to persist through the midterm elections this year, possibly extending into next year, providing long-term market opportunities for related brands.
See More
Gen Z's Nostalgia for 2016 and Its Impact on Retail
- Nostalgia Trend Emergence: Gen Z's nostalgia for 2016 has rapidly spread across social media, with Spotify user-generated '2016' playlists soaring by 790% since January 1, indicating a strong yearning for the cultural elements of that time, potentially driving a revival for related brands.
- Return to Brick-and-Mortar: Young consumers are rediscovering the appeal of in-store shopping after years dominated by e-commerce, reflecting a longing for the carefree and familiar comfort of 2016, which could stimulate a retail resurgence.
- Brand Opportunities Arise: Brands like Abercrombie & Fitch and Levi Strauss, which held significant cultural relevance in 2016, may leverage this nostalgia wave to regain market traction, especially as consumers show renewed interest in classic styles.
- Market Strategy Adjustments: As nostalgia rises, brands must adjust their market strategies to align with Gen Z's desire for authenticity and less intentionality, with successful brands likely to harness this emotional connection to reshape their cultural relevance.
See More
Molina Healthcare Stock Plummets 29% After Earnings Miss
- Unexpected Quarterly Loss: Molina Healthcare reported an unexpected quarterly loss, causing its stock to plummet 29% in a single day, marking the largest drop since 2012 and indicating significant challenges in profitability.
- Weak 2026 Outlook: The company issued a weak earnings outlook for 2026, which may undermine investor confidence and further pressure the stock price, reflecting market concerns about its future growth potential.
- Strong Overall Market Performance: Despite Molina Healthcare's stock decline, the Dow Jones Industrial Average surged nearly 2% on Friday, reaching a new all-time high, indicating a market preference for value stocks that may overshadow individual stock weaknesses.
- Small Caps Outperform: Small caps showed outstanding performance on Friday, with the Russell 2000 index soaring over 3%, suggesting increased investor confidence in smaller companies, contrasting sharply with Molina's performance.
See More
Coty Inc. Q2 2026 Earnings Call Insights
- Brand Focus Strategy: Coty Executive Chairman Markus Strobel emphasized a renewed focus on core brands like CoverGirl and Rimmel, noting that while sales declines have improved from high single digits to low single digits, the company still faces significant challenges in revitalizing these brands.
- Innovation Strategy Shift: The company plans to transition from large product bundles to streamlined SKU management, which will initially reduce pipeline fill in Q3 but is expected to improve sell-out velocity over time, thereby enhancing overall operational efficiency.
- Digital Marketing Investment: Coty is reallocating resources to focus on digital marketing and AI asset creation, with expectations of achieving a 70% to 80% cost reduction, which will help enhance brand competitiveness and optimize marketing strategies.
- Cautious Financial Outlook: Management anticipates a mid-single-digit sales decline in Q3, primarily driven by Consumer Beauty, and while there are expectations for profit recovery in the upcoming fiscal year, short-term challenges remain due to ongoing gross margin pressures and competitive market dynamics.
See More
