Coty
NYSE: COTY
$2.71 ▲ +0.06  (+2.26%)
At close: Jul 27, 2026 · 3:48 PM UTC
Financial Ratios
Market Cap2.38 Bn
P/E-4.37
P/S0.41
Div. Yield0.01
ROIC (Qtr)-0.01
Total Debt (Qtr)3.17 Bn
Revenue Growth (1y) (Qtr)-1.35
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About

Coty Inc. is one of the world's largest beauty companies with an iconic portfolio of brands across fragrance, color cosmetics, and skin and body care. The company develops, manufactures, markets, and distributes beauty products globally, leveraging its expertise in fragrance innovation, licensing, and brand building to serve diverse consumer preferences across multiple price points. Coty Inc. generates revenue primarily through the sale of its beauty products, including…

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Sector: Consumer Defensive Industry: Household & Personal Products CIK: 0001024305

Investment Thesis

▲ Bull case
  • Coty is executing a focused portfolio strategy in Consumer Beauty by prioritizing iconic assets like CoverGirl, Rimmel, and Sally Hansen, which has already shown early progress in reducing sales declines from high single digits to low-to-mid single digits, indicating that streamlining the brand portfolio is beginning to stabilize sell-out trends and lay the foundation for renewed market share gains as the company shifts from sell-in to sell-out discipline.
  • The company is leveraging AI-driven asset creation to achieve 70% to 80% cost reductions in marketing content production, freeing up significant working media spend that can be reinvested into consumer-facing initiatives such as influencer advocacy and digital engagement, which will improve sell-through velocity and brand relevance without proportional increases in SG&A expenses.
  • Coty’s Prestige division is gaining traction in high-growth e-commerce channels, with Amazon sales up 30% over the last six months and strong early performance from the Marc Jacobs launch on the platform, creating a halo effect that benefits brick-and-mortar sales and demonstrating effective adaptation to shifting consumer purchase behaviors.
  • The upcoming fiscal ’26 innovation bundle for Consumer Beauty is designed to be sharper and more streamlined, with better SKU rotation and protection of fast-moving core products, which will reduce trade returns and inventory buildup while improving sell-out velocity, setting the stage for a post-Q3 recovery in sales and gross margin as fixed cost absorption improves.
  • Coty’s enterprise-wide AI literacy program, “Supercharge with AI,” is driving measurable improvements in productivity, creativity, and decision-making across functions, embedding AI into daily workflows to accelerate innovation cycles and operational efficiency, which positions the company to innovate faster and more cost-effectively than peers in a rapidly evolving beauty landscape.
▼ Bear case
  • Coty’s Consumer Beauty segment remains under significant pressure due to persistent sell-in/sell-out misalignment, with management acknowledging that the company has historically prioritized sell-in over sell-out, leading to inventory buildup, trade returns, and gross margin pressure from fixed cost underabsorption, a structural issue that will take multiple quarters to correct despite current portfolio streamlining efforts.
  • The promotional environment in Prestige Beauty remains intensely competitive, with management admitting that high markdowns and aggressive trade terms from competitors are putting sustained pressure on gross margins, and this dynamic is expected to persist through Q3 and potentially beyond, undermining profitability even as sales begin to stabilize.
  • Coty’s innovation strategy continues to suffer from a lack of halo effect, as evidenced by the Hugo Boss Bottled Beyond launch, which gained 90 basis points of U.S. share but failed to lift the overall franchise, indicating that new product introductions are still cannibalizing core SKUs rather than driving total brand growth, a flaw that undermines the effectiveness of increased R&D spending.
  • The company’s reliance on legacy drugstore channels for Consumer Beauty brands like CoverGirl and Sally Hansen exposes it to secular decline in traditional retail, with management acknowledging weakness in these channels and noting that while they are investing in new channels like TikTok Shop, the volumes remain small today and the halo effect on brick-and-mortar is unproven at scale, creating uncertainty about long-term channel shift success.
  • Coty’s gross margin improvement is heavily dependent on the anniversarization of transient headwinds like tariffs and foreign exchange, which management concedes are temporary, meaning that any near-term margin recovery may not reflect true operational improvement and could reverse if these external factors persist or worsen, leaving the company vulnerable to macroeconomic shocks.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer Comparison

Companies in the Household & Personal Products
S.No. Ticker Company Market CapP/EP/STotal Debt (Qtr)
1 PG PROCTER & GAMBLE Co 346.57 Bn20.774.0037.03 Bn
2 UL Unilever Plc 134.15 Bn28.284.0532.92 Bn
3 CL Colgate Palmolive Co 73.76 Bn33.303.557.94 Bn
4 KVUE Kenvue Inc. 37.38 Bn23.052.448.66 Bn
5 KMB Kimberly Clark Corp 37.00 Bn92.972.237.08 Bn
6 EL Estee Lauder Companies Inc 30.15 Bn-157.862.037.31 Bn
7 CHD Church & Dwight Co Inc /De/ 23.41 Bn25.02419.552.40 Bn
8 CLX Clorox Co /De/ 11.83 Bn15.361.752.49 Bn