Coty’s (NYSE:COTY) Q2 CY2026 Sales Beat Estimates But Stock Drops

Coty (NYSE:COTY), a beauty products company spanning cosmetics, fragrances and skincare, reported Q2 CY2026 revenue of $1.27 billion, up 1.3% year on year and 5.7% above analysts’ $1.2 billion estimate. The stock nevertheless declined as profitability and forward demand remained concerns. Adjusted EPS was a loss of $0.02, missing the consensus loss of $0.01 by $0.01. Adjusted EBITDA reached $93.6 million, ahead of the $88.86 million estimate by 5.3%, with a 7.4% margin. Coty expects 1Q27 like-for-like revenue to decline by a low- to mid-single-digit percentage, a forecast characterized as a miss. Operating margin fell to negative 3.4% from 1.2% in the same quarter last year. Free cash flow margin improved to 5.7% from 2.8%, while organic revenue declined 1% year on year but exceeded expectations. Coty’s market capitalization is $2.41 billion. The company generated $5.81 billion of revenue over the past 12 months, making it a mid-sized consumer staples business. Its portfolio of household brands provides exposure to established beauty categories, although its smaller scale may limit brand awareness and economies of scale compared with larger competitors. Sales grew at a 1.5% compounded annual rate over the last three years, indicating limited demand expansion. Although the latest quarter delivered modest growth and exceeded Wall Street’s revenue forecast, sell-side analysts expect revenue to decline 1.3% over the next 12 months. That outlook points to continuing demand headwinds. Coty’s investment case therefore depends on the balance between its recognizable brands, improved free cash flow and weak growth, negative operating margin, adjusted EPS loss and declining 1Q27 LFL guidance. Valuation, alongside business quality, will determine whether the stock presents an attractive opportunity.