COTY INC.

Previous wording

Certain statements in this Form 10-Q are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, strategic planning, targets and outlook for future reporting periods (including the extent and timing of revenue, expense and profit trends and changes in operating cash flows and cash flows from operating activities and investing activities), the Company’s future operations and strategy (including the expected implementation and related impact of its strategic priorities), ongoing and future cost efficiency, optimization and restructuring initiatives and programs, expectations of the impact of inflationary pressures and the timing, magnitude and impact of pricing actions to offset inflationary costs, strategic transactions (including their expected timing and impact), expectations and/or plans with respect to joint ventures (including Wella and the timing and size of any related divestiture, distribution or return of capital), the Company’s capital allocation strategy and payment of dividends (including suspension of dividend payments and the duration thereof and any plans to resume cash dividends on common stock or to continue to pay dividends in cash on preferred stock) and expectations for stock repurchases, investments, licenses and portfolio changes, product launches, relaunches or rebranding (including the expected timing or impact thereof), plans for growth in growth engine markets, channels and other white spaces, synergies, savings, performance, cost, timing and integration of acquisitions, future cash flows, liquidity and borrowing capacity (including any refinancing or deleveraging activities), timing and size of cash outflows and debt deleveraging, the timing and magnitude of any “true up” payments in connection with our forward repurchase contracts, the timing and extent of any future impairments, and synergies, savings, impact, cost, timing and implementation of the Company’s ongoing strategic transformation agenda (including operational and organizational structure changes, operational execution and simplification initiatives, fixed cost reductions (including our Fixed Cost Reduction Plan), continued process improvements and supply chain changes), the impact, cost, timing and implementation of e-commerce and digital initiatives, the expected impact, cost, timing and implementation of sustainability initiatives (including progress, plans, goals and our ability to achieve sustainability targets), the expected impact of geopolitical risks including the ongoing war in Ukraine and/or the armed conflict in the Middle East on our business operations, sales outlook and strategy, expectations regarding the impact of tariffs (including magnitude, scope and timing) and plans to manage such impact, expectations regarding economic recovery in Asia, consumer purchasing trends and the related impact on our p…

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Current wording

Certain statements in this Form 10-Q are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, strategic planning, targets and outlook for future reporting periods (including the extent and timing of revenue, expense and profit trends and changes in operating cash flows and cash flows from operating activities and investing activities), the Company’s future operations and strategy (including the expected implementation and related impact of its strategic priorities), ongoing and future cost efficiency, optimization and restructuring initiatives and programs, expectations of the impact of inflationary pressures and the timing, magnitude and impact of pricing actions to offset inflationary costs, strategic transactions (including their expected timing and impact), the strategic review of the Company’s consumer beauty business, including its mass color cosmetics business and associated brands and the Company’s distinct Brazil business comprised of local Brazilian brands, and any transactions related thereto, use of proceeds from any transaction and the timing and outcome of the strategic review, expectations and/or plans with respect to joint ventures (including Wella and the timing and size of any related divestiture, distribution or return of capital), the Company’s capital allocation strategy and payment of dividends (including suspension of dividend payments and the duration thereof and any plans to resume cash dividends on common stock or to continue to pay dividends in cash on preferred stock) and expectations for stock repurchases, investments, plans and expectations with respect to licenses and/or portfolio changes, product launches, relaunches or rebranding (including the expected timing or impact thereof), plans for growth in certain categories, markets, channels and other white spaces, synergies, savings, performance, cost, timing and integration of acquisitions, future cash flows, liquidity and borrowing capacity (including any refinancing or deleveraging activities), timing and size of cash outflows and debt deleveraging, the timing and magnitude of any “true-up” payments in connection with our forward repurchase contracts and plans for settlement of such contracts, the timing and extent of any future impairments, and synergies, savings, impact, cost, timing and implementation of the Company’s ongoing strategic transformation agenda (including operational and organizational structure changes, operational execution and simplification initiatives, fixed cost reductions (including our recent fixed cost reduction plan), continued process improvements and supply chain changes), the impact, cost, timing and implementation of e-commerce and digital initiatives, the expected impact, cost, timing and implementation of sustainability initiatives (including progress, plans, goals and our ability to achi…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

•our ability to successfully implement our multi-year strategic transformation agenda and compete effectively in the beauty industry, achieve the benefits contemplated by our strategic initiatives (including revenue growth, cost control, gross margin growth and debt deleveraging) and successfully implement our strategic priorities (including stabilizing our consumer beauty brands through leading innovation and improved execution, accelerating our prestige fragrance brands and ongoing expansion into prestige cosmetics, building a comprehensive skincare portfolio, enhancing our organizational growth capabilities including digital, direct-to-consumer (“DTC”)and research and development, expanding our presence in growth channels, in China and other growth engine markets, and establishing Coty as an industry leader in sustainability) in each case within the expected time frame or at all;

Current wording

•our ability to successfully implement our strategic priorities (including leveraging our leadership position and capabilities in global fragrances to fuel strong expansion and continue to grow our footprint and diversification in a limited number of structurally profitable and growing beauty categories and geographic markets at scale), achieve the benefits contemplated by our strategic initiatives (including revenue growth, cost control, gross margin growth and debt deleveraging), and compete effectively in the beauty industry, in each case within the expected time frame or at all;

Previous wording

•managerial, transformational, operational, regulatory, legal and financial risks, including diversion of management attention to and management of cash flows, expenses and costs associated with our transformation agenda, our global business strategies, the integration and management of our strategic partnerships, and future strategic initiatives, and, in particular, our ability to manage and execute many initiatives simultaneously including any resulting complexity, employee attrition or diversion of resources;

Current wording

•managerial, transformational, operational, regulatory, legal and financial risks, including diversion of management attention to and management of cash flows, expenses and costs associated with our transformation agenda, our global business strategies, the management of our strategic partnerships, the strategic review of our consumer beauty business, and future strategic initiatives, and, in particular, our ability to manage and execute many initiatives simultaneously including any resulting complexity, employee attrition or diversion of resources;

Previous wording

•increased competition, consolidation among retailers, shifts in consumers’ preferred distribution and marketing channels (including to digital and prestige channels), distribution and shelf-space resets or reductions, compression of go-to-market cycles, changes in product and marketing requirements by retailers, reductions in retailer inventory levels and order lead-times or changes in purchasing patterns, impact from COVID-19 or similar public health events on retail revenues, and other changes in the retail, e-commerce and wholesale environment in which we do business and sell our products and our ability to respond to such changes (including our ability to expand our digital, direct-to-consumer and e-commerce capabilities within contemplated timeframes or at all);

Current wording

•increased competition, consolidation among retailers, shifts in consumers’ preferred distribution and marketing channels (including to digital and prestige channels), distribution and shelf-space resets or reductions, compression of go-to-market cycles, changes in product and marketing requirements by retailers, reductions in retailer inventory levels and order lead-times or changes in purchasing patterns, impact from public health events on retail revenues, and other changes in the retail, e-commerce and wholesale environment in which we do business and sell our products and our ability to respond to such changes (including our ability to expand our digital, direct-to-consumer and e-commerce capabilities within contemplated timeframes or at all);

Previous wording

•any unanticipated problems, liabilities or integration or other challenges associated with a past or future acquired business, joint ventures or strategic partnerships, which could result in increased risk or new, unanticipated or unknown liabilities, including with respect to environmental, competition and other regulatory, compliance or legal matters, and specifically in connection with our strategic partnerships, risks related to the entry into a new distribution channel, the potential for channel conflict, risks of retaining customers and key employees, difficulties of integration (or the risks associated with limiting integration) and management of the partnerships, our relationships with our strategic partners, our ability to protect trademarks and brand names, litigation, investigations by governmental authorities, and changes in law, regulations and policies that affect the business or products of our strategic partnerships, including risk that direct selling laws and regulations may be modified, interpreted or enforced in a manner that results in a negative impact to the business model, revenue, sales force or business of any of our strategic partnerships;

Current wording

•any unanticipated problems, liabilities or integration or other challenges associated with a past or future acquired business, joint ventures or strategic partnerships, which could result in increased risk or new, unanticipated or unknown liabilities, including with respect to environmental, competition and other regulatory, compliance or legal matters, and specifically in connection with our strategic partnerships, risks related to the entry into a new distribution channel, the potential for channel conflict, risks of retaining customers and key employees, difficulties of integration (or the risks associated with limiting integration) and management of the partnerships, our relationships with our strategic partners, our ability to protect trademarks and brand names, litigation, investigations by governmental authorities, and changes in law, regulations and policies that affect the business or products of our strategic partnerships, including the risk that direct selling laws and regulations may be modified, interpreted or enforced in a manner that results in a negative impact to the business model, revenue, sales force or business of any of our strategic partnerships;

Previous wording

•disruptions in operations, sales and in other areas, including due to disruptions in our supply chain, restructurings and other business alignment activities, manufacturing or information technology systems, labor disputes, extreme weather and natural disasters, impact from public health events, the outbreak of war or hostilities (including the war in Ukraine and armed conflict in the Middle East, and any escalation or expansion thereof), the impact of global supply chain challenges or other disruptions in the international flow of goods (including disruptions arising from changing tariff scenarios), and the impact of such disruptions on our ability to generate profits, stabilize or grow revenues or cash flows, comply with our contractual obligations and accurately forecast demand and supply needs and/or future results;

Current wording

•disruptions in operations, sales and in other areas, including due to disruptions in our supply chain, restructurings and other business alignment activities, manufacturing or information technology systems, labor disputes, extreme weather and natural disasters, impact from public health events, the outbreak of war or hostilities (including the war in Ukraine and armed conflict in the Middle East and any escalation or expansion thereof), the impact of global supply chain challenges or other disruptions in the international flow of goods (including disruptions arising from future tariff scenarios), and the impact of such disruptions on our ability to generate profits, stabilize or grow revenues or cash flows, comply with our contractual obligations and accurately forecast demand and supply needs and/or future results;

Previous wording

•our relationship with KKR, whose affiliate KKR Bidco, is an investor in the Wella Company, and any related conflicts of interest or litigation;

Current wording

•our relationship with KKR, whose affiliate KKR Bidco, is an investor in Rainbow JVCO LTD and subsidiaries (together, “Wella” or the “Wella Company”) following the sale of a majority stake in our Professional and Retail Hair business, including the Wella, Clairol, OPI and ghd brands (together, the “Wella Business”), and any related conflicts of interest or litigation;

Previous wording

We are one of the world’s largest beauty companies, with an iconic portfolio of brands across fragrance, color cosmetics, skincare, and body care. Our brands empower people to express themselves freely, creating their own visions of beauty and we are committed to protecting the planet. Our strategic priorities include stabilizing and growing our Consumer Beauty brands, accelerating our Prestige fragrance business and ongoing expansion into Prestige cosmetics, building a comprehensive skincare portfolio, enhancing our organizational growth capabilities including digital and research and development, expanding our presence in growth channels such as the Travel Retail channel, in growth engine markets (Latin America, including Brazil, the Middle East, North and South East Asia, China, Africa, and India), and establishing Coty as an industry leader in sustainability.

Current wording

We are one of the world’s largest beauty companies, with an iconic portfolio of brands across fragrance, color cosmetics, and skin and body care. Our brands empower people to express themselves freely, creating their own visions of beauty; and we are committed to protecting the planet. We have sharpened our priorities to capitalize on structural tailwinds in the fragrance market. We are leveraging our leadership in fragrance innovation, licensing, and manufacturing to expand across price points, from mass to ultra-premium and across scenting formats.

Previous wording

Our products are sold in approximately 121 countries and territories. As a geographically diverse company we are susceptible to global economic trends, geopolitical conflicts, domestic and foreign governmental policies, and changes in foreign exchange rates. In particular, challenging economic conditions in China have had, and are expected to continue to have, an impact on our strategic initiatives, including our growth agenda in the region for Prestige products and our skincare growth priorities. We remain attentive to economic and geopolitical conditions that may materially impact our business. We also continue to monitor and take actions to address the impact to our Consumer Beauty brands in China.

Current wording

Our products are sold in approximately 123 countries and territories. As a geographically diverse company we are susceptible to global economic trends, geopolitical conflicts, domestic and foreign governmental policies, and changes in foreign exchange rates. We remain attentive to economic and geopolitical conditions that may materially impact our business.

Previous wording

Recent changes in U.S. and international trade policies—particularly tariff increases—and the ongoing uncertainty surrounding such policies may present challenges to our business operations and financial condition. These challenges may include supply chain disruptions and commodity price volatility, resulting in increases in our cost of goods sold. Under the current tariff framework, the biggest areas of potential challenges for us are prestige fragrances shipped to the U.S. from our Barcelona plant, and the sourcing of various components and marketing materials from China. We estimate additional costs related to tariff increases to be in the range of approximately $90.0 to $130.0, the vast majority of which are expected to be incurred in fiscal 2026, based on a preliminary analysis of announcements made by the U.S. administration beginning on April 2, 2025 and announcements by U.S. trade partners. In response, we may consider more diversified sourcing strategies, strategic pricing adjustments and cost-reduction initiatives to help offset these pressures and protect our profitability. In addition, reductions in consumer confidence and discretionary spending could impact demand for our products and negatively affect our sales. We are closely monitoring developments, evaluating potential impacts, and proactively taking steps to mitigate adverse effects on our business.

Current wording

Recent changes in U.S. and international trade policies—particularly tariff increases—and the ongoing uncertainty surrounding such policies may present challenges to our business operations and financial condition. These challenges may include supply chain disruptions and commodity price volatility, resulting in increases in our cost of goods sold. Under the current tariff framework, the biggest areas of potential challenges for us are prestige fragrances shipped to the U.S. from our Barcelona plant, and the sourcing of various components and marketing materials from China. In response, we have evaluated more diversified sourcing strategies, strategic pricing adjustments and cost-reduction initiatives to help offset these pressures and protect our profitability. We are optimizing our supply chain to enhance resilience and agility in response to changing tariff environments. We have successfully transitioned mass fragrance production—including key brands such as Adidas, Origen, and Nautica—as well as fragrance mists to our U.S. manufacturing site. Additional transfers of entry-level prestige fragrance products are planned for early in the third quarter of fiscal 2026, further optimizing U.S. capacity.

Previous wording

•Color Cosmetics: Our net revenues from mass color cosmetics declined by low-double digits percentage during the same period due to a weakening in market demand, particularly in the United States and in several European markets. Our net revenues from prestige color cosmetics declined by a double-digits percentage, impacted by economic conditions in Asia affecting a key brand in the region.

Current wording

•Color Cosmetics: Our net revenues from mass color cosmetics declined by mid-single digits percentage during the same period due to a weakening in market demand for our products, particularly in European markets. Our net revenues from prestige color cosmetics declined by a high-single digits percentage, impacted by negative performance of our brands in the lip subcategory.

Previous wording

•Skin and Body Care: Our skincare portfolio contributed a low-single digit percentage of our first nine months fiscal 2025 net revenue. Competitive pricing actions in Brazil negatively impacted demand for certain of our deodorant brands leading to a high-double digit percentage decline in our body care net revenues during the first nine months of fiscal 2025, despite positive trends in the overall mass body care market.

Current wording

•Skin and Body Care: Our skincare portfolio contributed a mid-single digit percentage of our first three months fiscal 2026 net revenue. Competitive pricing actions in Brazil negatively impacted demand for certain of our deodorant brands leading to a low-double digit percentage decline in our body care net revenues during first three months fiscal 2026, despite positive trends in the overall mass body care market. The Consumer Beauty gross margin has benefited from a lower proportion of sales from lower priced Brazilian brands as a result of negative market trends in Brazil impacting volumes in the overall Consumer Beauty business.

Previous wording

We expect that some of the market trends may continue into fiscal 2026.

Current wording

While we are starting to see gradual improvements in some trends, we expect that some of the market trends may continue in fiscal 2026.

Previous wording

To supplement the financial measures prepared in accordance with GAAP, we use non-GAAP financial measures for continuing operations and Coty Inc. including Adjusted operating income (loss), Adjusted EBITDA, Adjusted net income (loss), and Adjusted net income (loss) attributable to Coty Inc. to common stockholders (collectively, the “Adjusted Performance Measures”). The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in tables below. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for or superior to, financial measures reported in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies, including companies in the beauty industry, may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

Current wording

To supplement the financial measures prepared in accordance with GAAP, we use non-GAAP financial measures for Coty Inc. including Adjusted operating income (loss), Adjusted EBITDA, Adjusted net income (loss), and Adjusted net income (loss) attributable to Coty Inc. to common stockholders (collectively, the “Adjusted Performance Measures”). The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in tables below. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for or superior to, financial measures reported in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies, including companies in the beauty industry, may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

Previous wording

Adjusted operating income/Adjusted EBITDA from continuing operations excludes restructuring costs and business structure realignment programs, amortization, acquisition- and divestiture-related costs and acquisition accounting impacts, stock-based compensation, and asset impairment charges and other adjustments as described below. For adjusted EBITDA, in addition to the preceding, we exclude adjusted depreciation as defined below. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. They are primarily incurred to realign our operating structure and integrate new acquisitions, and implement divestitures of components of our business, and fluctuate based on specific facts and circumstances. Additionally, Adjusted net income attributable to Coty Inc. and Adjusted net income attributable to Coty Inc. per common share are adjusted for certain interest and other (income) expense items and preferred stock deemed dividends, as described below, and the related tax effects of each of the items used to derive Adjusted net income as such charges are not used by our management in assessing our operating performance period-to-period.

Current wording

Adjusted operating income/Adjusted EBITDA excludes restructuring costs and business structure realignment programs, amortization, acquisition- and divestiture-related costs and acquisition accounting impacts, stock-based compensation, and asset impairment charges and other adjustments as described below. For adjusted EBITDA, in addition to the preceding, we exclude adjusted depreciation as defined below. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. They are primarily incurred to realign our operating structure and integrate new acquisitions, and implement divestitures of components of our business, and fluctuate based on specific facts and circumstances. Additionally, Adjusted net income attributable to Coty Inc. and Adjusted net income attributable to Coty Inc. per common share are adjusted for certain interest and other (income) expense items, as described below, and the related tax effects of each of the items used to derive Adjusted net income as such charges are not used by our management in assessing our operating performance period-to-period.

Previous wording

•Gain on sale and early license termination: We have excluded the impact of gain on sale and early license termination as such amounts are inconsistent in amount and frequency and are significantly impacted by the size of the sale and early license termination.

Current wording

•Gain or loss on sale and early license termination: We have excluded the impact of gain or loss on sale and early license termination as such amounts are inconsistent in amount and frequency and are significantly impacted by the size of the sale and early license termination.

Previous wording

During the period when we complete an acquisition, divestiture, early license termination, or market exit, the financial results of the current year period are not comparable to the financial results presented in the prior year period. When explaining such changes from period to period and to maintain a consistent basis between periods, we exclude the financial contribution of: (i) the acquired brands or businesses in the current year period until we have twelve months of comparable financial results, and (ii) the divested brands or businesses or early terminated brands or markets exited in the prior year period, to maintain comparable financial results with the current fiscal year period. Acquisitions, divestitures, early license terminations, and market exits that would impact the comparability of financial results between periods presented in the Management’s Discussion and Analysis of Financial Condition and Results of Operations are shown in the table below.

Current wording

During the period when we complete an acquisition, divestiture, early license termination, or market exit, the financial results of the current year period are not comparable to the financial results presented in the prior year period. When explaining such changes from period to period and to maintain a consistent basis between periods, we exclude the financial contribution of: (i) the acquired brands or businesses in the current year period until we have twelve months of comparable financial results, and (ii) the divested brands or businesses or early terminated brands or markets exited in the prior year period, to maintain comparable financial results with the current fiscal year period. There are no acquisitions, divestitures, early license terminations, and market exits that would impact the comparability of financial results between periods presented in the Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Previous wording

In the three months ended March 31, 2025, net revenues decreased 6%, or $86.5, to $1,299.1 from $1,385.6 in the three months ended March 31, 2024, reflecting a negative price and mix impact of 3% (primarily due to a higher proportion of the total sales coming from lower priced Brazil brands) and negative foreign currency exchange translation impact of 3% (primarily driven by the weakening of the Brazilian Real versus the U.S. dollar). The overall decrease in net revenues reflects declines within color cosmetics across both divisions— primarily due to negative market trends in the United States, China, and several European markets— and declines within Prestige fragrance—primarily due to the expiration of the Roberto Cavalli license in the prior year. Net revenues declined across all regions.

Current wording

In the three months ended September 30, 2025, net revenues decreased 6%, or $94.3, to $1,577.2 from $1,671.5 in the three months ended September 30, 2024, reflecting a decrease in unit volume of 10% (primarily driven by declines from the Consumer Beauty color cosmetics and body care brands), partially offset by positive foreign currency exchange translation impact of 2% (primarily driven by the weakening of the U.S. dollar versus the Euro year over year) and positive price and mix impact of 2% (primarily due to a higher proportion of total sales coming from higher priced Prestige brands). The overall decrease in net revenues reflects declines within fragrances across both our Prestige and Consumer Beauty segments. Within Prestige, fragrance sales declines are primarily due to customers working down high trade inventory levels along with decelerating market trends in most major markets. Within Consumer Beauty, fragrance declines are primarily due to negative performance of our brands and less innovation despite positive market trends across mass price points. The decline can also be attributed to color cosmetics— primarily due to the negative performance of our brands in most European markets and negative market trends in most major markets. Net revenues declined across all regions. Digital and e-commerce channel sales declines also contributed to the decrease in net revenues.

Previous wording

In the three months ended March 31, 2025, net revenues from the Prestige segment decreased 4%, or $37.8 to $829.4 compared to $867.2 in the three months ended March 31, 2024, reflecting a decrease in unit volume of 3% (primarily due to [negative market trends in the cosmetics category] and lower sales through the Travel retail channel for Prestige cosmetics) and negative foreign currency exchange translation impact of 1%, The decrease in net revenues primarily reflects:

Current wording

In the three months ended September 30, 2025, net revenues from the Prestige segment decreased 4%, or $44.6 to $1,069.5 compared to $1,114.1 in the three months ended September 30, 2024, reflecting a decrease in unit volume of 7% (primarily driven by declines from several prestige fragrance brands), partially offset by positive foreign currency exchange translation impact of 2% (primarily driven by the weakening of the U.S. dollar versus the Euro year over year) and positive price and mix impact of 1%. The decrease in net revenues primarily reflects:

Previous wording

•Prestige cosmetic sales declines of $20.6, primarily due to declines from Kylie makeup as a result of fewer innovations and declines in sales volume in the Asia Travel Retail channel from Gucci makeup as a result of regulations impacting the surrogate shopping purchases. The overall category sales decline can also be attributed to negative market trends in China; and

Current wording

•Prestige cosmetic sales declines of $3.8; and

Previous wording

•Prestige skincare sales declines of $4.3.

Current wording

•Prestige skincare sales declines of $2.1.

Previous wording

•Mass body care sales declines of $48.5, primarily due to declines in sales volumes from Monange in Brazil due to competitive pricing action in the deodorant market.

Current wording

•Mass bodycare sales declines of $9.3, primarily due to sales volumes declines from Monange andadidasin Brazil due to competitive pricing action in the deodorant market; and

Previous wording

In the three months ended March 31, 2025, cost of sales decreased 4%, or $21.1, to $466.7 from $487.8 in the three months ended March 31, 2024. Cost of sales as a percentage of net revenues increased to 35.9% in the three months ended March 31, 2025 from 35.2% in the three months ended March 31, 2024, resulting in a gross margin decrease of approximately 70 basis points, primarily reflecting:

Current wording

In the three months ended September 30, 2025, cost of sales decreased 3%, or $16.5, to $560.4 from $576.9 in the three months ended September 30, 2024. Cost of sales as a percentage of net revenues increased to 35.5% in the three months ended September 30, 2025 from 34.5% in the three months ended September 30, 2024, resulting in a gross margin decrease of approximately 100 basis points, primarily reflecting:

Previous wording

(i)approximately 70 basis points, primarily due to an increase in manufacturing and material costs as a percentage of net revenues. This increase in cost ratio was driven by lower net revenues in the current period—reflecting higher returns, discounts, and promotions. Although we achieved improvements in manufacturing efficiency, productivity, and procurement cost optimization, these benefits only partially offset the impact of the reduced net revenue base; and

Current wording

This decrease in gross margin was driven by lower net revenues in the current period—reflecting higher discounts and promotions. Although we achieved improvements in manufacturing efficiency, productivity, and procurement cost optimization, these benefits are offset by the impact of the reduced net revenue base.

Previous wording

In the three months ended March 31, 2025, selling, general and administrative expenses increased 1%, or $6.9, to $777.5 from $770.6 in the three months ended March 31, 2024. Selling, general and administrative expenses as a percentage of net revenues increased to 59.8% in the three months ended March 31, 2025 from 55.6% in the three months ended March 31, 2024, or approximately 420 basis points. This increase primarily reflects:

Current wording

In the three months ended September 30, 2025, selling, general and administrative expenses decreased 2%, or $14.5, to $793.5 from $808.0 in the three months ended September 30, 2024. Selling, general and administrative expenses as a percentage of net revenues increased to 50.3% in the three months ended September 30, 2025 from 48.3% in the three months ended September 30, 2024, or approximately 200 basis points. This increase primarily reflects:

Previous wording

(i)220 basis points due to a decrease in administrative costs as a result of decreased discretionary compensation for employees;

Current wording

(i)110 basis points due to a increase in administrative costs as a percentage of net revenues;

Previous wording

We have been making progress on our strategic priorities. In Consumer Beauty, we have implemented the relaunch of our top brands. We are now focusing on accelerating our digital advocacy strategy to amplify our brand and product innovations and leveraging consumer analytics and insights to improve the return on investment of our marketing activities. In Prestige, we are accelerating our fragrance business with exceptional new launches and franchise-building extensions, and expanding our premium and ultra-premium category portfolio, while also enhancing the assortment of our Prestige cosmetic products. We are continuing to thoughtfully expand our skincare portfolio (which contributed a low single digit percentage of our first nine months fiscal 2025 net revenue). We continue to expand our e-commerce capabilities across our portfolio, through online launches, our digital advocacy strategy and active participation in key online shopping events. We are adjusting our strategy in step with the beauty market evolution. Our aim is to continue expanding our footprint and diversifying into a limited number of structurally profitable and growing beauty categories and geographic markets at scale. We are leveraging and overdriving our leadership position and best-in-class capabilities in global fragrances to fuel strong expansion—with fragrances already constituting more than 60% of our fiscal 2024 net revenues and an even larger portion of our profits.

Current wording

(ii)110 basis points due to an increase in advertising and consumer promotional costs as a percentage of net revenues; and

Previous wording

(ii)90 basis points due to unfavorable transactional impact from our exposure to foreign currency as a percentage of net revenues;

Current wording

(i)30 basis points due to favorable transactional impact from our exposure to foreign currency as a percentage of net revenues.

Previous wording

In the nine months ended March 31, 2025, operating income was $225.6 compared to income of $512.0 in the nine months ended March 31, 2024. Operating margin as a percentage of net revenues, decreased to 4.9% in the nine months ended March 31, 2025 as compared to an operating margin of 10.8% in the nine months ended March 31, 2024. The decrease in operating margin is largely driven by the asset impairment charges (approximately 460 basis points), a loss on the termination of the KKW Collaboration Agreement (150 basis points), higher restructuring costs in the current period (approximately 100 basis points)and an increase in advertising and consumer promotional costs as a percentage of net revenues (approximately 40 basis points), partially offset by lower cost of goods sold as a percentage of net revenues (approximately 110 basis points), and a decrease in stock-based compensation expense (approximately 50 basis points) primarily related to a reduction in expense recognized in connection with a prior year's grant made to the CEO, and a decrease in fixed costs as a percentage of net revenues (approximately 20 basis points) primarily related to decreased discretionary compensation for employees. In addition, a greater proportion of total sales came from higher margin Prestige brands in the current period which positively benefited our operating margin.

Current wording

In the three months ended September 30, 2025, operating income was $185.0 compared to income of $237.8 in the three months ended September 30, 2024. Operating income margin, decreased to 11.7% in the three months ended September 30, 2025 as compared to operating income margin of 14.2% in the three months ended September 30, 2024. The decrease in operating margin is primarily driven by an increase in advertising and consumer promotional costs as a percentage of net revenues (approximately 110 basis points), an increase in cost of goods sold as a percentage of net revenues (approximately 100 basis points), an increase in fixed costs as a percentage of net revenues (approximately 100 basis points), partially offset by a decrease in amortization expense as a percentage of net revenues (approximately 40 basis points). In addition, a greater proportion of total sales came from higher margin Prestige brands in the current period which positively benefited our operating margin.

Previous wording

In the nine months ended March 31, 2025, operating loss for Consumer Beauty was $111.4 compared to income of $79.0 in the nine months ended March 31, 2024. Operating margin decreased to (7.0)% of net revenues in the nine months ended March 31, 2025 as compared to 4.6% in the nine months ended March 31, 2024, driven by asset impairment charges (approximately 1,070 basis points), an increase in miscellaneous accruals (approximately 60 basis points), an increase in advertising and consumer promotional expense as a percentage of net revenues (approximately 50 basis points), and higher costs of goods sold as a percentage of net revenues (approximately 30 basis points), partially offset by lower fixed costs as a percentage of net revenues (approximately 30 basis points) primarily related to decreased discretionary compensation for employees. Our Consumer Beauty operating income margin was negatively impacted by a greater proportion of net revenues generated by the lower margin brands in Brazil compared to the prior year.

Current wording

In the three months ended September 30, 2025, operating income for Prestige was $208.9 compared to income of $241.5 in the three months ended September 30, 2024. Operating margin decreased to 19.5% of net revenues in the three months ended September 30, 2025 as compared to 21.7% in the three months ended September 30, 2024, driven by an increase in advertising and consumer promotional costs (approximately 170 basis points), an increase in cost of goods sold as a percentage of net revenues (approximately 60 basis points), an increase in fixed costs as a percentage of net revenues (approximately 50 basis points), partially offset by a decrease in amortization expense as a percentage of net revenues (approximately 60 basis points).

Previous wording

In the three months ended March 31, 2025, the operating loss for Corporate was $169.6 compared to a loss of $17.6 in the three months ended March 31, 2024, as described under “Adjusted Operating Income for Coty Inc.” below. The increase in the operating loss for Corporate was primarily driven by a $88.9 increase in restructuring and other business realignment costs, the loss on the termination of the KKW Collaboration Agreement of $71.0, partially offset by a $8.3 decrease in stock-based compensation expense.

Current wording

In the three months ended September 30, 2025, the operating loss for Corporate was $16.2 compared to a loss of $17.7 in the three months ended September 30, 2024, as described under “Adjusted Operating Income for Coty Inc.” below. The decrease in the operating loss for Corporate was primarily driven by a $2.5 decrease in stock-based compensation expense, partially offset by a $1.0 increase in restructuring and other business realignment costs.

Previous wording

Operating Income, Adjusted Operating Income and Adjusted EBITDA - Consumer Beauty Segment

Current wording

Operating (Loss) Income, Adjusted Operating Income and Adjusted EBITDA - Consumer Beauty Segment

Previous wording

In the three months ended March 31, 2025, amortization expense decreased to $45.9 from $48.5 in the three months ended March 31, 2024. In the three months ended March 31, 2025, amortization expense of $37.2 and $8.7 was reported in the Prestige and Consumer Beauty segments, respectively. In the three months ended March 31, 2024, amortization expense of $38.6 and $9.9 was reported in the Prestige and Consumer Beauty segments, respectively.

Current wording

In the three months ended September 30, 2025, amortization expense decreased to $39.3 from $48.1 in the three months ended September 30, 2024. The decrease in amortization expense is primarily related to completed amortization term for certain license agreements and the termination of the KKW Collaboration Agreement in the previous fiscal year. In the three months ended September 30, 2025, amortization expense of $30.1 and $9.2 was reported in the Prestige and Consumer Beauty segments, respectively. In the three months ended September 30, 2024, amortization expense of $38.2 and $9.9 was reported in the Prestige and Consumer Beauty segments, respectively.

Previous wording

•We incurred business structure realignment costs of $10.6, which is reported in selling, general and administrative expenses and cost of sales, primarily related to the Fixed Cost Reduction Plan.

Current wording

•We incurred business structure realignment costs of $2.7, which is reported in Selling, general and administrative expenses.

Previous wording

•We incurred restructuring costs of $0.9 primarily related to the Restructuring Actions, included in the Condensed Consolidated Statements of Operations; and

Current wording

In the three months ended September 30, 2024, we incurred restructuring and other business structure realignment costs of $0.7, primarily related to the Current Restructuring Actions, included in the Condensed Consolidated Statements of Operations.

Previous wording

In the three months ended March 31, 2025, adjusted depreciation expense of $27.1 and $29.2 was reported in the Prestige and Consumer Beauty segments, respectively. In the three months ended March 31, 2024, adjusted depreciation expense of $25.7 and $30.3 was reported in the Prestige and Consumer Beauty segments, respectively.

Current wording

In the three months ended September 30, 2025, adjusted depreciation expense of $28.6 and $27.0 was reported in the Prestige and Consumer Beauty segments, respectively. In the three months ended September 30, 2024, adjusted depreciation expense of $27.9 and $28.6 was reported in the Prestige and Consumer Beauty segments, respectively.

Previous wording

In the three months ended March 31, 2025, net interest expense was $47.9 as compared with $60.4 in the three months ended March 31, 2024. The decrease in interest expense is primarily due to lower debt balances in the current period as well as lower interest rates.

Current wording

In the three months ended September 30, 2025, net interest expense was $46.6 as compared with $61.8 in the three months ended September 30, 2024. The decrease in interest expense is primarily due to lower average interest rates primarily reflecting positive impact from cross-currency swaps in reducing interest expense, as well as due to gains on foreign exchange forward contracts on the Euro as compared to losses in the prior year.

Previous wording

In the three months ended March 31, 2025, other expense was $132.3 as compared with other expense of $14.0 in the three months ended March 31, 2024.

Current wording

In the three months ended September 30, 2025, other expense was $31.3 as compared with other expense of $43.3 in the three months ended September 30, 2024. The decrease in Other expense of $12.0 is primarily due to lower net losses on forward repurchase contracts of $7.5 compared to the prior year period.

Previous wording

The effective tax rate of 34.3% for the nine months ended March 31, 2024 was higher than the statutory tax rate of 21% due to an expense of $24.3 in the period recognized on the revaluation of the Company's deferred tax liabilities due to a tax rate increase enacted in Switzerland.

Current wording

The effective tax rate of 30.9% for the three months ended September 30, 2025 was higher than the Federal statutory rate of 21% primarily due to the limitation on the deductibility of interest expense.

Previous wording

(b)The tax effects of each of the items included in adjusted income are calculated in a manner that results in a corresponding income tax expense/provision for adjusted income. In preparing the calculation, each adjustment to reported income is first analyzed to determine if the adjustment has an income tax consequence. The provision for taxes is then calculated based on the jurisdiction in which the adjusted items are incurred, multiplied by the respective statutory rates and offset by the increase or reversal of any valuation allowances commensurate with the non-GAAP measure of profitability. The total tax impact on adjustments in the current period includes a tax benefit of $10.0 on the resolution of uncertain tax positions associated with the Company’s exit from Russia in fiscal 2022.

Current wording

(b)The tax effects of each of the items included in adjusted income are calculated in a manner that results in a corresponding income tax expense/provision for adjusted income. In preparing the calculation, each adjustment to reported income is first analyzed to determine if the adjustment has an income tax consequence. The provision for taxes is then calculated based on the jurisdiction in which the adjusted items are incurred, multiplied by the respective statutory rates and offset by the increase or reversal of any valuation allowances commensurate with the non-GAAP measure of profitability.