Coty Inc. shares slid after the mass-market beauty company scrapped its fiscal 2026 outlook and warned of a weaker-than-anticipated third quarter.
The New York-based company, whose brands include CoverGirl and Sally Hansen, withdrew its prior fiscal 2026 guidance for EBITDA and free cash flow, citing its leadership transition and a “complex beauty market backdrop.” Coty had said in November it was targeting $1 billion in adjusted EBITDA for the fiscal year and free cash flow of $350 million in the first half.
Second-quarter like-for-like sales fell 3 percent, a smaller decline than the 3.5 percent drop analysts had expected, weighed down by what the company said was a heightened promotional environment and weakness in its consumer beauty business, particularly in the US and Europe.
“Coty has outstanding assets and capabilities, yet we have not been delivering at the level we should,” interim chief executive officer Markus Strobel said in a statement.
The company now expects like-for-like revenues to drop by a mid-single-digit percentage in the third quarter. Analysts polled by Bloomberg had expected no changes for that metric.
Strobel, who assumed leadership last month, said the company would continue to review its portfolio to “identify opportunities to unlock shareholder value.”
Last month, it sold its remaining stake in haircare brand Wella to KKR & Co. and said it would direct the proceeds toward debt reduction.
Coty shares, which more than halved in value last year, slid 14 percent in postmarket trading Thursday at 4:50 p.m. New York time.
US-listed peer Estée Lauder Cos. saw its shares tumble earlier Thursday after forecasting a disappointing outlook.
By Rachel Phua
Struggling Coty Names P&G Veteran as Interim CEO
Markus Strobel will replacing Sue Nabi, as the company faces pressure on its mass-market business and a steep share-price decline.
