Coty Warns of Soft Sales, Shares Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 05 2026
0mins
Should l Buy COTY?
Source: seekingalpha
- Sales Warning: Coty has warned of soft full-year sales due to persistent promotional activities, which has spooked investors and pressured shares in late trading, reflecting disappointing financial performance over the past year and a half.
- Strategic Framework Shift: Interim CEO Markus Strobel announced the initiation of the 'Coty. Curated' strategic framework aimed at sharper priorities and more focused investments to improve execution and bolster support for core businesses.
- Financial Performance Review: In the fiscal second quarter, Coty reported an adjusted profit of $0.14 per share, a 27% increase year-over-year but 4 cents below expectations, with total revenue reaching $1.68 billion, $20 million better than expected, although a decline in consumer beauty revenue nearly offset a 2% increase in prestige net revenue.
- Uncertain Future Outlook: Coty has withdrawn its FY26 EBITDA and free cash flow guidance, expecting a mid-single-digit percentage decline in like-for-like revenue in Q3 primarily due to weakening consumer beauty sales trends, with adjusted EBITDA projected between $100 million and $110 million, significantly lower than the $204.3 million estimates.
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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.
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- 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.
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- 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
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- 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.
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- 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
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- 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
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- 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
