Coty Stock Tumbles to 52-Week Low on Surprise Q4 Loss
Beauty giant's revenue beat is overshadowed by a significant earnings miss and an 8% decline in year-over-year sales.
Shares of Coty Inc. plummeted in after-hours trading after the global beauty company reported mixed financial results for its fiscal fourth quarter, with an unexpected loss that rattled investors. The stock fell over 15% to a 52-week low of $4.10 after the announcement.
While the company's revenue of $1.25 billion slightly surpassed analyst estimates of $1.20 billion, the beat was not enough to distract from a significant earnings shortfall. Coty posted an adjusted loss of 5 cents per share, a stark reversal of the 2 cents per share profit that Wall Street had anticipated. The results were further weakened by an 8.1% decline in total revenue compared to the same period last year and a 9% drop in organic revenue.
Sue Nabi, Coty's chief executive, addressed the challenging quarter in a statement, citing multiple pressures on the business. 'In FY25, despite headwinds from U.S. softness, retailer destocking, fragrance phasing off a strong FY24, and pressure in mass cosmetics, we moved with speed and focus to return Coty to a path of consistent and profitable growth,' Nabi said.
The underlying financial metrics revealed further areas of concern. The company's operating margin decreased to 1.2% from 2.5% in the prior-year quarter. Furthermore, Coty reported a negative free cash flow of $131.8 million for the quarter, a sharp decline from the positive $116.7 million generated in the same period last year, indicating struggles with cash profitability.
Looking ahead, Coty provided guidance for the first half of fiscal 2026, forecasting adjusted earnings to be between 33 and 36 cents per share. However, analysts expect the company's revenue to remain flat over the next 12 months, suggesting that the path back to sustained growth remains a challenge.