Coty (COTY) Stock Forecast & Price Target

Coty posted an adjusted EBITDA of $391 million for F2Q25, surpassing consensus expectations and reflecting a year-over-year increase of 7%, coupled with a significant rise in adjusted operating margin to 23.4%. The adjusted gross margin improved to 66.8%, attributed to supply chain efficiencies, pricing adjustments, and reductions in excess and obsolescence charges. Furthermore, Coty anticipates a strong performance with expected free cash flow growth of approximately 10% for the full year, alongside a projected reduction in leverage to below 2.5x by the end of calendar year 2025, indicating a solid financial outlook.

Coty reported a year-over-year decline in organic sales of -1% for F2Q25, marking the first drop since the onset of COVID-19, and significantly underperforming against the guidance of +1%-2%. The company’s Consumer Beauty segment saw a 4% sales decline, below the average growth of its mass beauty peers, which experienced approximately 2.7% growth in the same period, indicating a troubling trend in market competitiveness. Furthermore, Coty has adjusted its expectations for F2025, forecasting organic sales declines of 1%-2%, which contrasts sharply with consensus estimates of 3%-4% growth, underscoring persistent weaknesses in key markets including China and the U.S.