Executive Summary
Coty’s QQ2 2025 results show a modest top-line decline versus the prior-year period and a resilient but still narrow profit profile. Revenue reached USD 1.6699 billion, down 3.34% year over year and -0.10% quarter over quarter, reflecting ongoing mix shifts toward prestige and higher-margin categories, offset by currency and cost pressures. Gross profit was USD 1.1142 billion with a margin of 66.72%, while operating income was USD 268.2 million (margin ~16.06%). Net income stood at USD 23.7 million, yielding a net margin of 1.42% and diluted EPS of USD 0.0233–0.0234. Free cash flow was positive USD 418 million for the quarter, supporting discretionary cash flow despite a negative near-term balance sheet liquidity signal. Cash flow from operations was USD 464.5 million, capex was modest at USD 46.5 million, and free cash flow coverage remains a meaningful strength in the context of Coty’s leverage. On the balance sheet, total debt approached USD 3.66 billion with net debt of USD 3.41 billion, and liquidity metrics remain tight (current ratio 0.711, quick ratio 0.454). The company posted a sizable negative swing in total other income/expenses (USD -211.6 million) that weighed on net income this quarter. Management commentary (not provided in the supplied transcript) would be essential to understand the durability of margins amid ongoing cost inflation, FX headwinds, and a portfolio reweighting toward higher-margin lines. Overall, the investment thesis rests on cash generation, deleveraging potential, and the ability to realize operating leverage as the revenue mix matures; however, near-term profitability remains sensitive to cost structure and macro-driven demand.
Key Performance Indicators
QoQ: -71.41% | YoY:-86.90%
QoQ: -74.48% | YoY:-88.30%
Key Insights
Revenue: USD 1.6699B, YoY -3.34%, QoQ -0.10%
Gross Profit: USD 1.1142B, YoY -0.88%, QoQ +1.79%
Operating Income: USD 0.2682B, YoY +13.31%, QoQ +12.78%
Net Income: USD 0.0237B, YoY -86.90%, QoQ -71.41%
EPS (diluted): USD 0.0233, YoY -88.30%, QoQ -74.48%
Gross Margin: 66.72%
Operating Margin: 16.06%
Net Margin: 1.42%
EBITDA: USD 218.9M, Margin ~13.11%
Interest Coverage: 40.18x
Free Cash Flow: USD 418M
Operating Cash Flow: USD 464.5M
Capex: USD -46.5M
Cash at End of Period: USD 268.6M
Net Debt: USD...
Financial Highlights
Revenue: USD 1.6699B, YoY -3.34%, QoQ -0.10%
Gross Profit: USD 1.1142B, YoY -0.88%, QoQ +1.79%
Operating Income: USD 0.2682B, YoY +13.31%, QoQ +12.78%
Net Income: USD 0.0237B, YoY -86.90%, QoQ -71.41%
EPS (diluted): USD 0.0233, YoY -88.30%, QoQ -74.48%
Gross Margin: 66.72%
Operating Margin: 16.06%
Net Margin: 1.42%
EBITDA: USD 218.9M, Margin ~13.11%
Interest Coverage: 40.18x
Free Cash Flow: USD 418M
Operating Cash Flow: USD 464.5M
Capex: USD -46.5M
Cash at End of Period: USD 268.6M
Net Debt: USD 3.411B; Total Debt: USD 3.661B
Current Ratio: 0.711; Quick Ratio: 0.454; Cash Ratio: 0.0978
Payout Ratio: 14.3%
Debt/Capitalization: ~50.1%
EV/EBITDA (approx): ~56.8x
P/CF (approx): ~13x–14x (based on FCF and cash flow metrics)
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.67B |
-3.34% |
-0.10% |
| Gross Profit |
1.11B |
-0.88% |
1.79% |
| Operating Income |
268.20M |
13.31% |
12.78% |
| Net Income |
23.70M |
-86.90% |
-71.41% |
| EPS |
0.02 |
-88.30% |
-74.48% |
Key Financial Ratios
operatingProfitMargin
16.1%
operatingCashFlowPerShare
$0.53
freeCashFlowPerShare
$0.48
dividendPayoutRatio
14.3%
Management Commentary
No earnings transcript data provided in the supplied dataset. Unable to extract management quotes or theme-specific commentary. If a transcript is supplied, key themes would typically include portfolio optimization, price realization, cost reduction initiatives, supply chain dynamics, and forward guidance. Please provide the transcript to enable theme-based synthesis and quote extraction.
Forward Guidance
No explicit forward guidance was provided in the provided data. Absent formal targets, investors should monitor: 1) trajectory of revenue mix between prestige and mass portfolios and the impact on gross and operating margins; 2) ongoing cost control and any inflation pass-through embodied in price realization; 3) FX headwinds and commodity cost exposure; 4) leverage trajectory and debt maturities given net debt near USD 3.41B; 5) cash conversion and working capital dynamics given negative current liquidity indicators. If management communicates targets on margin expansion, brand portfolio optimization, or share repurchase program, those would be pivotal to updating the thesis. In the current setup, the base case assumes stabilization of revenue and gradual margin improvement as the company benefits from scale in high-margin channels, complemented by prudent capital allocation focused on deleveraging and stock of cash flow.