Coty reports unexpected loss, sluggish sales in FY23 Q4.

• Bloomberg investigates Coty Inc. for securities fraud and unlawful practices. • Coty reports unexpected loss and disappointing guidance in Q4 2025. • CFO blames sluggish sales on value-seeking behavior and innovation fatigue. • Coty's digital data shows moderating profit in the broader beauty market. • Bloomberg advises investors to contact Danielle Peyton for more information.

Bloomberg has launched an investigation into Coty Inc. (COTY) following allegations of securities fraud and unlawful practices. The investigation comes on the heels of Coty's Q4 2025 financial results, which revealed a significant drop in revenue and a substantial stock price decline. Coty's CFO, Danielle Peyton, attributed the sluggish sales to value-seeking behavior and innovation fatigue, while digital data indicated moderating profits in the broader beauty market.

The Law Offices of Frank R. Cruz has announced an investigation into Coty Inc. on behalf of investors concerning possible violations of federal securities laws. The investigation is related to the company's negative financial results due to retailer destocking and inventory misalignment, which led to a 21.6% stock price drop on August 21, 2025 [1].

Coty reported an 8% year-over-year decline in revenue to $1,252.4 million for the quarter ended June 30, 2025, and an adjusted EPS of $(0.05), missing analyst expectations by a significant margin. The quarter saw a 37% decline in operating income (Non-GAAP) and a sharp drop in free cash flow. The Consumer Beauty division, in particular, suffered a 12% drop in sales, largely due to an asset impairment charge recorded in Q3 [2].

Coty's management expects continued sales declines in early FY26, with a return to like-for-like (LFL) sales growth projected for the second half of FY26. The company has cited retailer destocking and inventory misalignment as key factors contributing to its financial struggles. These issues have led to significant margin pressures, particularly in the mass market beauty segments. The company has been actively working to realign shipments to match real consumer demand and has responded to tariff risks by increasing U.S. manufacturing for mass-market and entry-level fragrances [1].

Investors are advised to watch for early performance of new prestige fragrance launches, progress on further cost-saving initiatives, and signs of stabilization in U.S. mass-market beauty channels. Coty's management has highlighted upcoming launches of Prestige fragrances and ongoing digital transformation as potential drivers for a turnaround. The company has also been investing in e-commerce and strategic partnerships to expand its digital reach [1].

The investigation by The Law Offices of Frank R. Cruz aims to uncover whether Coty's management adequately disclosed these issues to investors. Investors who lost money due to these circumstances are urged to contact the law firm for further information.

References:
[1] https://www.morningstar.com/news/business-wire/20250821017645/securities-fraud-investigation-into-coty-inc-coty-announced-investors-who-lost-money-urged-to-contact-the-law-offices-of-frank-r-cruz
[2] https://www.ainvest.com/news/investigation-coty-coty-securities-fraud-announced-investors-urged-contact-law-offices-frank-cruz-2508/