Coty Inc. Class A (COTY)

Coty reported a surprise loss for its second fiscal quarter, which led to a significant stock drop. The company initiated a strategic review of its consumer beauty division, signaling potential divestitures. Coty sold its remaining stake in the hair care brand Wella to KKR for $750 million. Markus Strobel was appointed as the new Executive Chairman and Interim Chief Executive Officer, replacing Sue Nabi. Coty announced its results for the second quarter of fiscal year 2026, reporting a basic EPS loss and a net income loss, and retracted its fiscal year 2026 guidance, introducing a new strategic framework called "Coty. Curated." Coty would lose its exclusive Gucci fragrance and beauty license in 2028, as Kering agreed to sell its beauty business to L'Oréal. Over the past year, Coty's stock has experienced a significant decline.

Demand for Coty's products and services exhibits seasonality. Consumer demand for beauty products, particularly fragrances, is generally solid. The company anticipates cash outflow in the third fiscal quarter due to typical business seasonality and working capital phasing.

Coty, Inc. is a multinational beauty company founded in Paris in 1904, now incorporated in Delaware, United States, with its global headquarters in Amsterdam, Netherlands. It operates within the Consumer Defensive sector and the Consumer Packaged Goods industry, with notable market shares in Cosmetic & Beauty Products Manufacturing, Perfume & Fragrance Manufacturing, and Lipstick Manufacturing. Coty develops, manufactures, markets, and distributes a wide array of products, including fragrances, cosmetics, skincare, nail care, and professional and retail hair care products. The company's business is primarily divided into two commercial divisions: Prestige and Consumer Beauty. The Prestige division focuses on luxury beauty products, predominantly fragrances, through licenses with high-end brands. The Consumer Beauty division focuses on mass-market brands, offering makeup, skincare, and fragrance products.

Coty boasts a significant global presence, with its products sold in over 125 countries across six continents. Europe contributes close to 48% of its sales, the Americas account for 40%, and the Asia-Pacific region makes up 12%. The company supports its global operations with research and development centers located in Germany, Monaco, the US, China, and Switzerland, along with manufacturing facilities and extensive marketing and distribution networks worldwide.

Coty's brand reputation in the past year has been mixed. The interim CEO acknowledged that the company's financial performance has been "disappointing," which is reflected in its current share price. Coty was named on Straits Research-Technology's Top 10 influential perfume brands list. Specific brands within its portfolio also received positive media attention. Coty also announced a partnership with Netflix and Shondaland to unveil a Bridgerton-inspired fragrance collection.

Coty Inc. has a diverse ownership structure. Major institutional owners include BlackRock, Inc., Vanguard Group Inc, BNP Paribas Arbitrage, Sa, Banco Santander, S.A., Credit Agricole S A, Dimensional Fund Advisors Lp, State Street Corp, and D. E. Shaw & Co., Inc. Agnaten SE holds a controlling stake in the company. Approximately 18.51% of the company's stock is owned by institutional investors, 57.46% by insiders, and 24.03% by public companies and individual investors.