Coty Inc.

Management did not provide a formal earnings table on this Q&A-only call, but it did give several hard figures: the Middle East is a mid-teens region for the company and a mid-single-digit share of Coty overall; a $1 change in oil price impacts profit by about $2 million; the company said it is protected against oil inflation roughly through the end of calendar 2026; tariffs impacted P&L by about $30 million this year; and Q3 A&CP was flat, implying higher spend as a percentage of revenue. On the operating side, management said the market grew 5% in Q3 in both Prestige and mass, and that CoverGirl is now growing in U.S. unit volume versus the market. Forward-looking, management said fiscal 2027 EBITDA trend should improve year over year, while oil inflation and some short-term items could remain headwinds.

Markus Strobel framed Q3 as an early proof point for Coty.Curated, saying the company is still not where it wants to be but is improving. His message centered on a shift from sell-in to sellout, tighter innovation curation, and a more selective marketing approach that emphasizes bigger, better launches with stronger brand halo effects. He also stressed that the company is making strategic choices to exit unprofitable activities and focus on the franchises and geographies where it can win.

Laurent Mercier highlighted specific cost and margin exposures, including a roughly $2 million profit hit for each $1 move in oil, protection from oil inflation through about the end of calendar 2026, and about $30 million of tariff impact on P&L this year. He said the Middle East carries meaningful exposure for both top line and margin, with travel retail and the Emirates more affected than Saudi Arabia. On spending, he noted Q3 A&CP was flat, meaning it rose as a percentage of revenue, and said the company consciously shifted some spend to support high-ROI moments like Mother’s Day and Father’s Day. He also linked sellout discipline to better inventory, forecast accuracy, excess and obsolescence, and cash generation.

Analysts focused on the sell-in/sellout gap, Middle East disruption, elevated promotions, oil inflation, tariffs, and whether the SKU rationalization and brand exits are enough to improve margins. Management said the sell-in gap was driven by Middle East interruption, promotion intensity, and retailer inventory digestion, while Consumer Beauty sell-in was also affected by deliberate changes to smaller, sharper bundles and exits from small markets. On margins and cash, management argued the new sellout culture should reduce inventory and obsolescence over time, and CFO Laurent Mercier said Q3 A&CP was flat and being reallocated to high-ROI events rather than cut.