Coty's Top Six Prestige Brands Return to Growth

The Tip Desk · November 10, 2026 · 5 min read

The beauty company posted $1,555.2 million in first-quarter sales and $84.6 million of free cash flow as like-for-like sales fell 2%.

Coty Inc. (COTY) reported first-quarter fiscal 2027 net revenues of $1,555.2 million, down 1% on a reported basis and 2% like-for-like from $1,577.2 million a year earlier. The like-for-like decline was broadly in line with the fourth quarter of fiscal 2026 and compared with 6% and 4% like-for-like declines in the first and second halves of fiscal 2026, the company said. Profit and earnings per share were ahead of guidance, the company said, and free cash flow was $84.6 million.

Executive Chairman and Interim Chief Executive Officer Markus Strobel said results were ahead of expectations on sales, adjusted EBITDA, and EPS, supported by the Coty.Curated framework. He said the like-for-like sales decline narrowed to 2%, reflecting improvements in the U.S., Asia Pacific, and Latin America, and that the company still had work to do to translate green shoots into a broad-based recovery.

The beauty company concentrated investment behind its Top 6 core Prestige brands — Hugo Boss, Burberry, Calvin Klein, Marc Jacobs, Chloé, and Kylie Cosmetics — which represented 73% of Prestige sales in the quarter. Those brands moved from a 6% like-for-like decline in the first half of fiscal 2026 to 5% like-for-like growth in the first quarter, with five of the six growing. Key launches including BOSS Bottled Beyond for Her, Mood Stones by Kylie Jenner, and Marc Jacobs makeup contributed approximately 2% of that growth.

Prestige net revenue was $1,058.4 million, or 68% of total sales, down 1% on both a reported and like-for-like basis. Reported Prestige operating income was $211.0 million, up 1% from $208.9 million, with a 19.9% margin. Adjusted Prestige EBITDA was $262.5 million. The company said reported Prestige revenue fell primarily on a moderate decline in fragrance and skin care, partially offset by growth in cosmetics, and that reported operating income rose primarily on lower advertising and consumer promotional costs, largely offset by lower gross margin.

Consumer Beauty net revenue was $496.8 million, or 32% of sales, down 2% reported and 3% like-for-like. The like-for-like decline narrowed to 3% from 8% in the first half of fiscal 2026, the company said. Reported Consumer Beauty operating loss widened to $24.1 million from a $7.7 million loss, with a -4.9% margin. Adjusted EBITDA in the division was $11.7 million. The company said the reported revenue decline was driven primarily by color cosmetics and mass fragrance, partially offset by mass body care, and that the operating loss widened on lower gross margin and higher SG&A.

Reported and adjusted gross margin was 63.3%, down 120 basis points year-over-year. The company said the decline reflected higher freight and material costs related to the Middle East conflict and higher excess and obsolescence. Reported operating income was $170.4 million, with an 11.0% margin. Adjusted EBITDA was $274.2 million, down 7% from $296.1 million, with a 17.6% margin. Chief Financial Officer Soraya Benchikh said the year-over-year decline in adjusted EBITDA moderated to 7% from steeper declines in fiscal 2026.

Reported net income attributable to common shareholders was $106.2 million, or $0.12 a share, compared with $64.6 million, or $0.07 a share, a year earlier. Adjusted net income was $146.1 million, or $0.16 a share. Both reported and adjusted results included a $14.8 million benefit from the mark-to-market on the equity swap, compared with a $26.5 million negative impact in the prior-year quarter.

Cash flow from operations was $130.4 million, compared with $65.2 million a year earlier. Free cash flow was $84.6 million, compared with $11.2 million. Benchikh said better payables and receivables helped free cash flow, and that free cash flow together with the initial $250 million of Gucci Beauty proceeds reduced net debt by over $300 million since June. Total debt was $2,787.0 million on September 30, 2026, down from $3,088.2 million as of June 30, 2026. Financial net debt was $2,576.4 million, for a net-debt-to-adjusted-EBITDA leverage of 3.1x.

By region, Americas net revenue was $653.0 million, up 1% reported, driven by higher sales in Brazil. EMEA net revenue was $710.0 million, down 6% reported and 5% like-for-like, on lower sales in the Middle East and Europe. Asia Pacific net revenue was $192.2 million, up 11% reported and 8% like-for-like, driven by China, Southeast Asia, and Asia Travel Retail.

Coty extended the Marc Jacobs license to a 40-year duration, building on a partnership that began in 2003. The company said it remains committed to completing a strategic review by the end of calendar 2026 and that fiscal 2027 will be a transition year. It expects second-quarter fiscal 2027 like-for-like revenue to decline by a low-single-digit percentage, broadly consistent with the last two quarters, with continued like-for-like sales growth in the Top 6 core Prestige brands. On a reported basis it expects a low-single-digit foreign-exchange headwind to second-quarter revenues. Coty anticipates second-quarter adjusted EBITDA to decline by a high-single-digit percentage, resulting in adjusted EPS, excluding the equity swap, of $0.16 to $0.18 a share. It continues to expect free cash flow for the first half of fiscal 2027 of over $300 million.