Coty shares jump on forecast for second-half growth recovery

Coty Inc. shares jumped after the beauty company reiterated its forecast for like-for-like sales to recover in the second half of its fiscal year and said business in the current quarter will be stronger than in the prior three months.

The stock, which fell 46% this year through Wednesday’s close, driven by revenue drops over several quarters, gained as much as 13% after the bell. 

The New York-based beauty company, whose portfolio includes CoverGirl, Gucci Beauty, Burberry, and Kylie Cosmetics by Kylie Jenner, said like-for-like sales, which measures revenue from existing business units, declined 8% in the fiscal first quarter. In August it forecast a drop of 6% to 8%.

Coty said it expects quarter-on-quarter improvements in its prestige and consumer beauty segment in the current period, and it continues to see like-for-like sales returning to growth in the fiscal second half. Key product launches in prestige and more favourable comparisons will help, the company said.

“Following recent changes, Coty’s underlying business trends are already improving, in line to slightly ahead of our expectations,” Chief Executive Sue Nabi said in a statement. “We expect Q2 sales to be at the more favourable end of our previous guidance, with a return to sales and profit growth in the second half of FY26.”

Reported revenue of $1.58 billion roughly matched the average analyst estimate. Like-for-like revenue in its consumer and prestige segments fell 11% and 6%, respectively. Adjusted earnings per share of 12 cents lagged estimates of 15 cents.

Although there’s consistent demand for fragrances across all price points and formats, retailers are hesitant due to macroeconomic factors and tariff uncertainties, Coty said. Regionally, the Americas and the region including Europe fell short of estimates. However, Asia Pacific sales fell less than analysts expected, aided signs of gradual improvement in the Chinese beauty market and continued strong fragrance performance.

Coty global prestige performance reflected a decline in makeup and skincare sales, and consumer beauty’s drop reflected weakness in most European markets and some trade destocking within mass fragrances.

Coty expects a “gradual profit trend improvement,” with adjusted earnings before interest, taxes and depreciation declining by a low-to-mid teens percentage in the second-quarter, consistent with its prior guidance, and a return to adjusted Ebitda growth in the January-June 2026 period. It’s targeting fiscal-year adjusted Ebitda of $1 billion, compared with an average analyst estimate of $990 million.