Coty Inc

Coty shares dropped about 7% after the company reported a wider-than-expected adjusted loss and issued weaker near-term profit guidance, despite a fourth-quarter revenue beat. Revenue rose 1.3% to $1.27 billion, above the consensus forecast for a 4.6% decline, but the adjusted loss was $0.02 per share versus the $0.01 consensus loss, like-for-like sales fell 1%, and the reported net loss widened to $141 million. Coty expects first-quarter adjusted earnings of $0.11 to $0.13 per share, below the $0.14 consensus estimate, and projects like-for-like revenue to decline by a low- to mid-single-digit percentage. Management withheld fiscal 2027 guidance and called the period a transition year, even though fiscal 2025 carried the same label. The company received $250 million at the signing of the Gucci Beauty agreement and is due another $150 million by September 30, 2027, subject to a possible holdback of up to $30 million, but returning the license early will remove a meaningful source of sales and profit beginning in fiscal 2028.

Coty Inc discussed its fourth quarter fiscal 2026 results on August 20, 2026, highlighting a strategic turnaround and the renegotiated Gucci license exit. The company secured full compensation for a year of profit and cash, funds for debt reduction and restructuring, and a solution for inventory. Coty is implementing a 'Color the Future' program to reduce SKUs by 20% and shift incentives toward market share and sellout. The company faces continued challenges in fiscal 2027, described as a transition year, with sellout trailing the category and uncertainty in the Middle East and oil prices. Coty is targeting fiscal 2027 EBITDA and free cash flow close to fiscal 2020 levels.

Coty is shifting its internal focus from retail shipments to consumer sell-out and market-share gains as it navigates fiscal 2027, with management expecting near-term trends to remain challenging before improving sequentially. Executive Chairman and Interim CEO Markus Strobel said the company is changing incentives to better align with consumer demand at the shelf, and market share and sell-out have become important measures in Coty's fiscal 2027 bonus systems. The company's Consumer Beauty turnaround program, Color the Future, is simplifying product assortments and concentrating advertising and innovation behind key brands such as COVERGIRL and Sally Hansen, with the approach set to expand into Europe. Coty is targeting underlying portfolio growth excluding Gucci in fiscal 2028, while restructuring its operations to offset lost Gucci-related profit. Management expects fiscal 2027 EBITDA to exceed $50 million and free cash flow to remain near fiscal 2026 levels.

Several companies made notable premarket moves on Thursday. Walmart dropped 6% after its U.S. comparable sales grew 2.6%, missing the 3.5% FactSet estimate, and its earnings guidance fell short. Crypto stocks rose as Bitcoin and ether surged on President Trump's push for crypto-friendly legislation, with Coinbase up nearly 7% and Strategy jumping 10%. Alibaba fell 3.4% after reporting a 75% drop in quarterly profit due to higher AI spending. Moderna shed 7% a day after soaring 177% on positive late-stage cancer vaccine trial results. Advance Auto Parts tumbled nearly 15% after revenue of $1 billion missed the $2.04 billion LSEG estimate. Coty slipped 14.5% after a larger-than-expected quarterly loss and a warning that fiscal 2027 will be a transition year. Wolfspeed fell 10% after quarterly revenue of $149.6 million missed the $150 million FactSet consensus. NetEase slipped nearly 4% after its quarterly earnings missed analyst estimates.

Stock futures were lower early Thursday as persistent geopolitical tensions in the Middle East drove Brent crude over $92 a barrel, reinforcing broader inflation concerns. Webull shares climbed 14% after the digital investment platform reported record Q2 revenue of $198.8M, up 51% Y/Y and 24% Q/Q, beating estimates of $180.7M, while Ultragenyx Pharmaceutical surged 12% after the FDA granted accelerated approval to Genglycos, its gene therapy for glycogen storage disease type Ia. Circle Internet Group gained 5% alongside a broader rally in crypto-linked stocks as Bitcoin climbed more than 9% to around $71K, its highest level since June 2, following the U.S. Treasury's surprise decision to double planned buybacks of longer-dated Treasuries to at least $4B per operation. Wolfspeed plunged 10% after reporting a wider-than-expected FQ4 adjusted loss of $2.26 per share, versus the $1.47 consensus, while revenue rose 24% Y/Y to $149.6M, and Coty tumbled 9% after mixed FQ4 results with LFL revenue down 1% and adjusted operating income plunging 31%.

Coty Inc. is expected to report a top-line decline when it releases fourth-quarter fiscal 2026 earnings on Aug. 19. The Zacks Consensus Estimate for revenues is pegged at around $1.2 billion, indicating a 4.8% decrease from the year-ago period. The consensus estimate for the bottom line has remained unchanged over the past 30 days at a loss of 1 cent a share, which suggests an increase of 80% from the figure reported in the year-ago period. Coty's earnings lagged the consensus mark by a wide margin in the trailing four quarters, on average. Management expects fourth-quarter like-for-like revenues to be down by mid-single-digit percentage, with continued disruption in the Middle East estimated to have a 2-3% impact on fourth-quarter revenues. Coty expects fourth-quarter adjusted EBITDA of $85-$95 million and adjusted EPS, excluding the equity swap, between breakeven and a loss of 2 cents per share.

Coty and Campbell's shares each fell 2.7% in afternoon trading after President Trump declared the Iran ceasefire over and threatened further strikes, triggering a crude oil spike of more than 7%. The surge in energy costs raised freight and production expenses for consumer staples companies, squeezing margins at a time when passing costs to price-sensitive shoppers risks losing volume. Additionally, a jump in global government bond yields on inflation fears made the steady dividends of staples less attractive relative to bonds, further pressuring the shares. Campbell's, which is down 19.7% year-to-date and trading 34.6% below its 52-week high, saw a move that the market considered meaningful but not fundamentally altering its business perception.

e.l.f. Beauty shares have pulled back sharply, now trading at 19.3 times forward 12-month earnings, well below their five-year median of 52.36 times. The stock is down 14.4% year to date and 48.5% over the trailing 12 months, while management projects fiscal 2027 sales growth of 12% to 14%. Non-e.l.f. brands now represent about 30% of global consumption, with skincare climbing to roughly 23% of the mix from 9% three years ago. Rhode delivered about $390 million in fiscal 2026 net sales, growing more than 80% year over year, and remains in less than 20% of Sephora's global stores. Naturium generated nearly $250 million in fiscal 2026 global retail sales, roughly double its pre-acquisition level. International markets accounted for 21% of fiscal 2026 net sales. However, adjusted earnings fell 59% to 32 cents per share in the fourth quarter of fiscal 2026, as marketing and digital investment rose to 31% of sales from 23% a year earlier. Fiscal 2027 guidance calls for net sales of $1.84 billion to $1.90 billion and adjusted earnings of $3.27 to $3.32 per share, but depends on a second-half turnaround after an expected high-single-digit first-quarter organic sales decline. The core e.l.f. brand slowed to low-single-digit consumption growth in the final 12 weeks of fiscal 2026.