Coty: Sales up slightly in Q4, disposal of Gucci Beauty and exit from Wella
Coty published its results for the fourth quarter and fiscal year 2026, ended June 30, 2026, on August 19, 2026.
Beyond the return to sales growth in Q4 (+1%), the publication confirms two structuring portfolio decisions: the agreement concluded in July 2026 to return the Gucci Beauty license to Kering and the monetization in December 2025 of the residual stake in Wella, two operations whose proceeds are notably allocated to debt reduction.
Q4 sales up 1%, fiscal year 2026 down 2%
In the fourth quarter, Coty recorded net sales of $1,269.2 million, up 1% on a reported basis and down 1% on a comparable basis (LFL). This figure came in above expectations, with the group reporting fourth quarter results that exceeded forecasts.
For the full fiscal year 2026, net sales stood at $5,806.6 million, down 2% on a reported basis and down 5% on a comparable basis. Reported gross margin came in at 61% in Q4 and 63% for the fiscal year.
The group quantified the adverse effect of the Middle East conflict on quarterly sales at approximately 1%. Reported operating income for Q4 was negative, at −$42.7 million.
Cash generation up despite lower profit
For fiscal year 2026, Coty reports an increase in operating cash flow to $538 million and in free cash flow to $348 million, with this increase occurring despite lower profit.
The group attributes these performances to cost control and the alignment between wholesale sales (sell-in) and consumer sales (sell-out). Management notes, however, that sell-out performance remains below market levels in both divisions, and presents narrowing this gap as a priority.
As part of its debt reduction approach, Coty monetized its residual stake in Wella in December 2025 for $750 million.
Agreement to return Gucci Beauty license to Kering for $400 million
In July 2026, Coty announced an agreement to return the Gucci Beauty license to Kering, approximately one year before its expiration, for $400 million, in addition to proceeds related to inventories.
The group indicates that this exit will result in a reduction in sales and profit in fiscal year 2028, and is preparing measures aimed at mitigating its effect: acceleration of core portfolio brands, contribution from new licenses (makeup under Marc Jacobs Beauty, fragrances under Swarovski, Etro and Marni) and a fixed cost reduction program.
According to management, fiscal year 2027 will constitute a transition year, incorporating the exit from Gucci by 2028 and final decisions related to the strategic review of the Consumer Beauty division expected by the end of calendar year 2026.
