Aug 20, 2026 earnings call — Transition year: focus on sell-out and restructure
Management targets fiscal year '27 EBITDA and free cash flow close to fiscal '26 levels.
Revenue $1.3B (est $1.2B) · EPS $-0.02 (est $-0.01)
Key quotes
"So our objective is to drive sell-out and to drive market share."
"And we will -- when we look at the 20% SKU reduction on shelves, we don't believe this is going to have any material impact on our sales."
"It was really our objective to get the full compensation of a year of profit and cash."
Analyst Q&A 10
Europe consumer brands and U.S. SKUs
Q (Javier Escalante Manzo · Evercore): Analyst asked why EMEA (ex-Middle East) consumer brands are not improving and asked details on smaller brands. He also asked if SKU cuts and marketing CapEx relate to the U.S. and what shelf resets mean for CoverGirl this fall.
A: Management said they started a consumer improvement program in January (Color the Future), first in the U.S. on CoverGirl and Sally Hansen, and will roll it out to European brands like Max Factor and Gua Sha. They said a 20% SKU reduction on shelves should not hurt sales and may reduce returns and obsolescence. They also said cosmetic CapEx is expensive but they are lowering CapEx via procurement and vendor work.
"We have started our Color the Future performance improvement program in the consumer business in basically in January, and that's a version of Coty.Curated for consumer." — Markus Strobel (CEO·CHAIR)
Smaller European makeup brands
Q (Laurent Mercier): Analyst asked for more detail on the smaller European brands (examples like ASTOR, Manhattan) and about shelf resets into the fall and shelf space risk.
A: Management said Manhattan is essentially Rimmel in Germany and that brands like Manhattan, Max Factor, and Bourjois will get the same interventions next. They said shelf space has been mostly stable through recent resets, with small gains and losses, and they do not see a big risk to shelf space currently.
"Manhattan -- Manhattan is basically the equivalent of Rimmel in Germany, okay?" — Markus Strobel (CEO·CHAIR)
Promotions and review deadline
Q (Anna Lizzul · BofA): Analyst asked about the promotional and pricing environment, and whether the strategic review of Consumer Beauty must finish by calendar 2026 or if that deadline is flexible.
A: Management said pricing has moved back and forth and that in Prestige holiday pricing competition has eased, and companies are being more surgical on which SKUs to price higher. They said finishing the Consumer Beauty strategic review by calendar '26 is their very strong aspiration, though they would be flexible if results required more time.
"So it's our very, very, very strong aspiration to get it done by then." — Markus Strobel (CEO·CHAIR)
Drivers of U.S. improvement
Q (Susan Anderson · Canaccord Genuity): Analyst asked whether CoverGirl and Sally Hansen improvements came from marketing, price changes, promotions, or new innovation, and asked about international performance.
A: Management said the U.S. improvement is driven less by promotions and more by focused advertising and focused spending on core franchises. They said they are back on national TV for CoverGirl and Sally Hansen and cited successful innovations (for example Insta-Dri for Sally Hansen).
"We're back on national advertising on Sally Hansen in the nail care category, coupled with some very good innovation like our Insta-Dri innovation has found an extremely good reception" — Markus Strobel (CEO·CHAIR)
Brazil and international growth
Q (Laurent Mercier): Analyst asked if the mass body and skin care growth internationally was from Brazil and how Europe compares to the U.S.
A: Management said Brazil is back to growth and that is where the skin care improvement comes from. They reiterated Europe is behind the U.S. rollout of interventions but the U.S. approach is working and will be replicated in Europe, noting good early Rimmel response in the U.K.
Confidence in returning portfolio to growth
Q (Stephen Robert Powers · Deutsche Bank): Analyst asked how confident management is in returning the portfolio (ex-Gucci) to growth by fiscal '28 and what the critical building blocks are. He also asked how much mitigation of Gucci loss depends on growth versus cost cuts.
A: Management said key actions are focused investment in big global brands, more incremental innovation that creates a halo, and concentrating efforts where they can win. They also said their cost savings and restructuring program alone can close the gap from the Gucci departure, so they plan both growth and cost actions (a 'belt and suspenders' approach).
"our cost savings program, restructuring program alone can get the gap" — Markus Strobel (CEO·CHAIR)
Consumer Beauty strategic review and overhead cuts
Q (Olivia Tong Cheang · Raymond James): Analyst asked for an update on the Consumer Beauty strategic review and whether Brazil would be an easier carve-out. She also asked what specific actions will minimize overhead after Gucci leaves.
A: Management said they are reviewing the whole Consumer business together to find the best-value solution rather than seeking the easiest carve-out. They said they secured full compensation from Kering for a year of profit and cash and that they are planning a serious restructuring covering go-to-market, manufacturing, distribution, delayering, and rightsizing central functions.
"Yes, it's very ring-fenced and it would be easier in isolation, but we are not looking for necessarily the team and easy looking for the best solution that creates the most value for us." — Markus Strobel (CEO·CHAIR)
Incentives and avoiding promo chasing
Q (Sydney Wagner · Jefferies): Analyst asked how adding market share to incentives will not encourage promotional volume chasing that hurts margins, and what guardrails exist.
A: Management said the bonus structure includes market share, sales, and a very strong EBITDA component, so promotion-driven sales would reduce profit and hurt incentive outcomes. They said the design already has guardrails to favor sell-out growth aligned with profit and avoid swings in inventory.
"So we cannot just really, really do promotion to increase sales, it comes at the expense of profit, right?" — Markus Strobel (CEO·CHAIR)
SKU cuts and timing
Q (Andrea Teixeira · JPMorgan): Analyst asked about timing and implementation of SKU reductions and whether this will cost shelf space.
A: Management said SKU reductions are executed as part of shelf resets in spring and fall and they will do this in the next few months. They added that removing slow-moving SKUs can allow retailers to give more facings to fast-moving SKUs, helping both manufacturer and retailer, so it does not necessarily mean a loss of overall shelf space.
"When it comes to the SKUs, it's basically part of the shelf resets that happen in spring and in fall." — Markus Strobel (CEO·CHAIR)
Travel retail role in launches
Q (Julia Shelanski · TD Cowen): Analyst asked how important travel retail recovery is for new launches versus domestic and specialty channels.
A: Management said Travel Retail is important not just for sales but for image and strong launch placement. They said Travel Retail gives big displays, beauty consultants, and high visibility that create image and attract customers, and noted Travel Retail is growing nicely for them.
"I think Travel Retail is an important channel for us because Travel Retail is not only there to create sales, Travel Retail is there to create the image." — Markus Strobel (CEO·CHAIR)