Investigation into Coty Inc. (COTY) Securities Fraud Announced; Investors Urged to Contact The Law Offices of Frank R. Cruz

The Law Offices of Frank R. Cruz announces an investigation of 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. Investors who lost money are urged to contact the law firm for further information.

Coty Inc. (NYSE:COTY), a leading global beauty company, has faced a significant setback with the announcement of an investigation by The Law Offices of Frank R. Cruz on behalf of investors. The investigation is focused on potential violations of federal securities laws, specifically concerning the company's negative financial results due to retailer destocking and inventory misalignment. This has led to a substantial 21.6% stock price drop on August 21, 2025.

The investigation comes on the heels of Coty's Q4 FY2025 results, which revealed an 8% year-over-year decline in revenue to $1,252.4 million. The company reported an adjusted EPS of $(0.05), which missed analyst expectations by a significant margin. The quarter saw an operating income (Non-GAAP) decline of 37% 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, which affected mass color cosmetics brands such as Max Factor and CoverGirl [1].

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.nasdaq.com/articles/coty-posts-8-revenue-drop-fiscal-q4
[2] https://site.financialmodelingprep.com/market-news/coty-shares-plunge--as-quarterly-loss-and-weak-outlook-rattle-investors
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3UC1CJ:0-coty-inc-reports-results-for-the-quarter-ended-june-30-earnings-summary/