Coty Inc. Q1 FY2026 earnings call

• Exiting the Gucci license: Focus for Coty in coming years is on overdriving brands with big long-term growth potential, amplifying new licenses, and optimizing Gucci during its remaining term while respecting contractual rights. - Licensing model: 85% of portfolio is owned, perpetual, or has long-term licenses (over 7 years), with no single brand accounting for more than ~10% of sales. - H2 growth: Expected to be back to growth driven by momentum in the prestige fragrance category, strong innovation like BOSS Beyond Bottled, and improving inventory dynamics where sell-out and sell-in are synchronized. - Color cosmetics: Division led by Gordon Von Bretten, with mandate to rejuvenate P&L and cash generation, covering top line, margins, and cost structures. - Mist and Ultra Prestige: Mist designed with principles to target Gen Z, using patented formulations for lasting scent; ultra-premium market growing, with Coty's portfolio of brands like Atelier des Fleurs, Burberry Signature, etc., aiming to build a significant business. - Brazil: Profitable business with local portfolio, potential for new acquirer given its size, profitability, and dynamics.

No detailed breakdown of financial performance for each product segment in absolute terms and revenue contribution % provided in the transcript.

• Q2 guidance at higher end due to strong fragrance market dynamics in the U.S., success of BOSS Beyond Bottled, and improving inventory dynamics. - H2 expected to continue growth driven by beauty category momentum, robust innovation, and synchronized sell-out/sell-in.

Q: Talk about how exiting the Gucci license will impact the portfolio, Kering's influence on licensing model, and potential early license termination.

A: Sue Nabi states focus on overdriving high-growth brands, amplifying new licenses, and optimizing Gucci during remaining term; licensing model remains strong with 85% of portfolio in long-term or owned, and ongoing amicable discussions with Kering on license operation.

Q: Follow-up on Coty's lawsuit against Kering and financial impact of Gucci license transition.

A: Sue Nabi mentions focusing on portfolio growth post-Gucci license exit, with profit impact from Gucci loss in future years, and defends rights in ongoing litigation.

Q: Discuss Q2 performance drivers and fragrance mix opportunity.

A: Sue Nabi cites strong fragrance market in U.S., success of BOSS Beyond Bottled, Mist's incremental sales and margin in line with prestige fragrances as drivers.

Q: Talk about H2 key launches and Brazil consumer beauty.

A: Sue Nabi highlights H2 growth driven by beauty category momentum, strong innovation like BOSS Beyond Bottled, and color cosmetics division under Gordon Von Bretten; Brazil is a profitable business with potential for new acquirer.

Q: Discuss Mist and Ultra Prestige opportunities, and promotion impact.

A: Sue Nabi explains Mist's design targeting Gen Z with patented formulations and ultra-premium market potential; Laurent Mercier discusses promotional discipline and product mix covering full price spectrum.

Q: Discuss e-commerce impact, EMEA Prestige fragrance, and China market.

A: Laurent Mercier and Sue Nabi talk about e-commerce dynamics, EMEA fragrance growth, and China market recovery with Coty's portfolio of ultra-premium brands.

Q: Talk about prestige fragrance holiday expectations and mass beauty channel shift.

A: Laurent Mercier and Sue Nabi discuss holiday season expectations in prestige fragrance and channel shifts in mass beauty, with focus on TikTok and Amazon as key channels.

Q: Discuss strategic review of Brazil and color cosmetics, and wellness sale.

A: Sue Nabi discusses Brazil's potential for new acquirer and color cosmetics strategic review to make the business growing and profitable, separate from wellness which is actively pursued.