Coty’s free cash flow rises to $85m as sales fall 1%

Coty said free cash flow rose to $84.6 million in its fiscal first quarter ended September 30 from $11.2 million a year earlier, according to a November 4 Business Wire press release.

Coty said in the November 4 press release that net revenue for the three-month period fell 1% year on year to $1.56 billion, making the cash improvement a counterweight to still-weak sales.

The New York-based beauty company reported adjusted earnings per share of $0.16, up from $0.12 a year earlier. Reported EPS rose to $0.12 from $0.07, while reported net income attributable to common shareholders increased 64% to $106.2 million.

“Our first quarter results were ahead of expectations on sales, adjusted EBITDA, and EPS, alongside a significant improvement in free cash flow, supported by the focus of Coty.Curated,” Markus Strobel, executive chairman and interim chief executive officer, said in the press release.

Adjusted EBITDA, a non-GAAP profit measure used by the company, fell 7% year on year to $274.2 million. Coty said reported and adjusted gross margin declined 120 basis points to 63.3%, citing higher freight and material costs tied to the Middle East conflict and elevated excess and obsolescence costs.

The company’s Prestige segment generated $1.06 billion of revenue, or 68% of total sales, and declined 1% on both a reported and like-for-like basis. Consumer Beauty revenue was $496.8 million, or 32% of total sales, down 2% reported and 3% like for like.

Coty said its top six core Prestige brands — Hugo Boss, Burberry, Calvin Klein, Marc Jacobs, Chloé and Kylie Cosmetics — returned to 5% like-for-like growth after a 6% decline in the first half of fiscal 2026. The company said those brands accounted for 73% of Prestige sales in the quarter.

Coty also said it extended the Marc Jacobs license to a 40-year duration, building on a partnership that began in 2003. Strobel said Marc Jacobs fragrances rank among the top 10 to 15 prestige female fragrances in the U.S., U.K., Canada and Australia.

The company cut financial net debt to $2.58 billion at September 30 from $2.91 billion at June 30. Chief Financial Officer Soraya Benchikh said free cash flow and the initial $250 million of Gucci Beauty proceeds reduced net debt by more than $300 million since June.

Management was cautious about the pace of improvement. Coty said its overall sell-out, or retail sales to consumers, still trails the market in both Prestige and Consumer Beauty, even as prestige and mass beauty markets continue to grow.

Strobel said Coty remains committed to completing its strategic review by the end of calendar 2026. The company said fiscal 2027 will be a transition year and that the recovery is expected to be uneven.

Source: Business Wire press release, Coty Inc., November 4, 2026