Coty Pivots to Core Brands and Scraps Financial Outlook Amid Leadership Transition
New York, Friday, 6 February 2026.
On February 5, 2026, Coty Inc. withdrew its full-year financial guidance, signaling a major strategic reset under new interim CEO Markus Strobel. Facing a 15% decline in adjusted EBITDA and sluggish performance in its consumer beauty segment, the company unveiled its “Coty. Curated” framework to streamline operations and prioritize high-performing assets. Despite a revenue increase to $1.68 billion in Q2, the market reacted negatively, with shares dropping over 8% as the company missed earnings forecasts. The most critical development lies in Strobel’s immediate move to halt smaller projects and terminate licenses like Orveda, focusing instead on powerhouses like Burberry and Kylie Cosmetics. With leverage at a nine-year low following the $750 million Wella stake sale, Coty is positioning itself for a leaner future, though it warns of continued headwinds in the coming quarter.
Financial Realities and Market Response
The earnings report released on February 5, 2026, painted a complex picture of the beauty giant’s fiscal health. While net revenue for the second quarter ended December 31, 2025, ticked up 1% to $1.68 billion, the underlying figures reveal operational friction [4]. On a like-for-like basis, revenue actually contracted by 3%, and adjusted EBITDA fell 15% year-over-year to $330.2 million [4]. The company reported adjusted earnings per share (EPS) of $0.14, falling short of analyst expectations of $0.18 [7]. Consequently, Coty’s stock tumbled 8.16% in aftermarket trading to $3.16, reflecting investor anxiety over the missed targets and the withdrawal of full-year guidance [7].
The “Coty. Curated.” Strategy
“Our financial performance over the past year and a half has been disappointing, and our current share price reflects that reality,” stated Markus Strobel, who assumed the role of interim CEO on January 1, 2026 [2]. In response, Strobel has initiated the “Coty. Curated.” strategic framework, designed to reduce complexity and refocus investment on core assets [4]. This pivot involves immediate portfolio rationalization; notably, the company confirmed the termination of its license with Orveda, the ultra-premium skincare brand founded by former CEO Sue Nabi [2]. Furthermore, Coty plans to discontinue smaller fragrance initiatives and halt new projects that dilute focus, redirecting resources toward established winners like Adidas, Bruno Banani, and Mexx [7].
Segment Performance and Future Headwinds
A divergence in category performance underscores the necessity of this strategic shift. The Prestige segment remains the dominant revenue driver, generating $1.13 billion in the quarter, a 2% reported increase [4]. Brands such as Burberry and Kylie Cosmetics posted mid-single-digit growth, with Kylie Cosmetics ranking as the second most engaging beauty brand on social media in 2025 [2][7]. Conversely, the Consumer Beauty division continues to drag on results, with net revenue falling 5% reported and 8% on a like-for-like basis for the first half of the fiscal year [4].