COTY INC.

Previous wording

The following discussion and analysis of the financial condition and results of operations of Coty Inc. and its consolidated subsidiaries, should be read in conjunction with the information contained in the Condensed Consolidated Financial Statements and related notes included elsewhere in this document, and in our other public filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (“Fiscal 2025 Form 10-K”). When used in this discussion, the terms “Coty,” the “Company,” “we,” “our,” or “us” mean, unless the context otherwise indicates, Coty Inc. and its majority and wholly-owned subsidiaries. Also, when used in this Quarterly Report on Form 10-Q, the term “includes” and “including” means, unless the context otherwise indicates, including without limitation. The following report includes certain non-GAAP financial measures. See “Overview—Non-GAAP Financial Measures” for a discussion of non-GAAP financial measures and how they are calculated.

Current wording

The following discussion and analysis of the financial condition and results of operations of Coty Inc. and its consolidated subsidiaries, should be read in conjunction with the information contained in the Condensed Consolidated Financial Statements and related notes included elsewhere in this document, and with our other public filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (“Fiscal 2026 Form 10-K”). When used in this discussion, the terms “Coty,” the “Company,” “we,” “our,” or “us” mean, unless the context otherwise indicates, Coty Inc. and its majority and wholly-owned subsidiaries. Also, when used in this Quarterly Report on Form 10-Q, the term “includes” and “including” means, unless the context otherwise indicates, including without limitation. The following report includes certain non-GAAP financial measures. See “Overview—Non-GAAP Financial Measures” for a discussion of non-GAAP financial measures and how they are calculated.

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), 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, the timing and size of any future distribution related to the Wella Distribution Rights (as defined below), 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 reduction plans, 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 expecte…

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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, as well as the Company’s expectations for the impact of the exit from the Gucci Beauty license), the Company’s future operations and strategy (including the ongoing refinement and implementation and related impact of its global business strategies), the Company’s plans to evaluate its central organization, manufacturing and asset base, and certain market structures to adjust its scope and size for its future business, the Company’s ongoing and future cost efficiency, optimization and restructuring initiatives and programs (including plans to develop a significant fixed-cost savings plan in connection with the exit from the Gucci Beauty license), the ongoing 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, the timing and outcome of such strategic review and any transactions related thereto, use of proceeds from any such transactions, expectations and/or plans with respect to joint ventures, the timing and size of any future distribution related to the Wella Distribution Rights, 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 or 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 strengthening presence in certain categories, markets and channels, expectations for the impact, costs, timing and outcome of any future divestitures, expectations for synergies, savings, performance, cost, timing and integration of any future acquisitions, expectations for 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 the settlement of such contracts, the timing and extent of any future impairments, and synergies, savings, impact, cost and timing of the Company’s ongoing refinement and implementation of its global business strategies (including operational and organizational structure changes, operational execution and simplification initi…

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Previous 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;

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 strengthen our presence in a limited number of structurally profitable and growing beauty categories and geographic markets at scale), achieve the benefits contemplated by our long-term objectives (including value creation, growth, profitability and debt deleveraging), and compete effectively in the beauty industry, in each case within the expected time frame or at all;

Previous wording

•our ability to anticipate, gauge and respond to market trends and consumer preferences, which may change rapidly, and the market acceptance of new products, including new products in our skincare and prestige cosmetics portfolios, any relaunched or rebranded products and the anticipated costs and discounting associated with such relaunches and rebrands, and consumer receptiveness to our current and future marketing philosophy and consumer engagement activities (including digital marketing and media), andour ability to effectively manage our production and inventory levels in response to demand;

Current wording

•our ability to anticipate, gauge and respond to market trends and consumer preferences, which may change rapidly, and the market acceptance of new products, including new products in our prestige fragrance and prestige cosmetics portfolios, any relaunched or rebranded products and the anticipated costs and discounting associated with such relaunches and rebrands, and consumer receptiveness to our current and future marketing philosophy and consumer engagement activities (including digital marketing and media), and our ability to effectively manage our production and inventory levels in response to demand;

Previous wording

•future divestitures and the impact thereof on, and future acquisitions, new licenses and joint ventures and the integration thereof with, our business, operations, systems, financial data and culture and the ability to realize synergies, manage supply chain challenges and other business disruptions, reduce costs (including through our cash efficiency initiatives), avoid liabilities and realize potential efficiencies and benefits (including through our restructuring initiatives) at the levels and at the costs and within the time frames contemplated or at all;

Current wording

•future divestitures and the impact thereof on, and future acquisitions, new licenses and joint ventures and the integration thereof with, our business, operations, systems, financial data and culture and the ability to realize synergies, manage supply chain challenges and other business disruptions, reduce costs (including through our cash efficiency initiatives), avoid liabilities and realize potential efficiencies and benefits (including through our restructuring initiatives or current or future fixed-cost savings plans) at the levels and at the costs and within the time frames contemplated or at all;

Previous wording

•restrictions imposed on us through our license agreements, credit facilities and senior unsecured bonds or other material contracts, our ability togenerate cash flow to repay, refinance or recapitalize debt and otherwise comply with our debt instruments, and changes in the manner in which we finance our debt and future capital needs;

Current wording

•restrictions imposed on us through our license agreements, credit facilities and senior unsecured bonds or other material contracts, our ability to generate cash flow to repay, refinance or recapitalize debt and otherwise comply with our debt instruments, and changes in the manner in which we finance our debt and future capital needs;

Previous wording

•increasing dependency on information technology, including as a result of expanded use of AI and advanced analytics in our operations as well asremote working practices, and our ability or the ability of any of the third-party service providers we use to support our business, to protect against service interruptions, data corruption, cyber-based attacks or network security breaches, including ransomware attacks, costs and timing of implementation and effectiveness of any upgrades or other changes to information technology systems, and the cost of compliance or our failure to comply with any privacy or data security laws (including the European Union General Data Protection Regulation (the “GDPR”), the California Consumer Privacy Act and similar state laws, the Brazil General Data Protection Law, and the China Data Security Law and Personal Information Protection Law) or to protect against theft of customer, employee and corporate sensitive information;

Current wording

•increasing dependency on information technology, including as a result of expanded use of AI and advanced analytics in our operations as well as remote working practices, and our ability or the ability of any of the third-party service providers we use to support our business, to protect against service interruptions, data corruption, cyber-based attacks or network security breaches, including ransomware attacks, costs and timing of implementation and effectiveness of any upgrades or other changes to information technology systems, and the cost of compliance or our failure to comply with any privacy or data security laws (including the European Union General Data Protection Regulation (the “GDPR”), the California Consumer Privacy Act and similar state laws, the Brazil General Data Protection Law, and the China Data Security Law and Personal Information Protection Law) or to protect against theft of customer, employee and corporate sensitive information;

Previous wording

•our relationship with KKR, whose affiliates are investors 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 the subsequent sale of our remaining Wella stake, any related conflicts of interest or litigation, and the timing and terms of any future sale or initial public offering of Wella;

Current wording

•our relationship with KKR, whose affiliates are investors in the Wella Company following the sale of a majority stake in our Professional and Retail Hair business and the subsequent sale of our remaining Wella stake, any related conflicts of interest or litigation, and the timing, terms and proceeds of any future sale or public offering of Wella and the impact thereof on our distribution rights;

Previous 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.

Current wording

Our products are sold globally. 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

Tariffs: 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, production for certain entry-level prestige fragrance products, and fragrance mists to our U.S. manufacturing site.

Current wording

Tariffs: 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.

Previous wording

We currently estimate that our operating results will be impacted by approximately $32.0 in costs related to tariff increases, after mitigating actions, through the first quarter of fiscal 2027. Of this amount, approximately $30.0 is expected to be reflected in our fiscal 2026 operating results, with the remaining amount of approximately $2.0 expected to be reflected in the first quarter of fiscal 2027. In the first nine months of fiscal 2026, approximately $23.0 of net tariff costs are reflected in our operating results. Despite our efforts, 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

We currently estimate that our operating results will be impacted by approximately $29.8 in gross costs related to tariff increases, after prior mitigating actions, in fiscal 2027. In the first three months of fiscal 2027, approximately $6.7 of net tariff costs are reflected in our operating results. Despite our efforts, 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.

Previous wording

Middle East Conflict: In February 2026, geopolitical tensions in the Middle East escalated significantly leading to a military conflict involving the United States, Israel, and Iran, and resulting in regional instability and increased volatility in global energy markets. We have mitigated certain direct impacts, including those related to disruptions in regional shipping routes such as transit through the Strait of Hormuz. Continued or expanded conflict could adversely affect global economic conditions, supply chains, transportation logistics, and customer demand, and is expected to impact our financial condition, and results of operations. Impacts may vary depending on how conditions develop across the region and in global markets. Net revenues in the Middle East accounted for approximately mid-single-digit percentage of our consolidated net revenues for fiscal 2025. The Middle East accounted for approximately mid-single-digit percentage and low-single-digit percentage of Prestige and Consumer Beauty segment fiscal 2025 net revenues, respectively.

Current wording

Middle East Conflict: In February 2026, geopolitical tensions in the Middle East escalated significantly leading to a military conflict involving the United States, Israel, and Iran, and resulting in regional instability and increased volatility in global energy markets. Continued or expanded conflict could adversely affect global economic conditions, supply chains, transportation logistics, and customer demand, and is expected to impact our financial condition, and results of operations. Impacts may vary depending on how conditions develop across the region and in global markets. Net revenues in the Middle East accounted for approximately low-single digit percentage of our consolidated net revenues for the first quarter of fiscal 2027, and declined by a high double-digit percentage compared to the prior year. The Middle East accounted for approximately mid-single-digit percentage and low-single-digit percentage of Prestige and Consumer Beauty segment first quarter fiscal 2027 net revenues, respectively. We currently estimate that, if Brent crude oil prices remain within the range of $90 to $100 per barrel due to the Middle East conflict, our operating results in fiscal 2027 could be impacted by an increase of approximately $25.0 to $30.0 in cost of goods sold.

Previous 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.

Current wording

Adjusted operating income (loss) / 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 (loss) attributable to Coty Inc. and Adjusted net income (loss) 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 (loss) as such charges are not used by our management in assessing our operating performance period-to-period.

Previous 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.

Current wording

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

Previous wording

•Stock-based compensation: Although stock-based compensation is a key incentive offered to our employees, we have excluded the effect of these expenses from the calculation of adjusted operating income and adjusted EBITDA. This is due to their primarily non-cash nature; in addition, the amount and timing of these expenses may be highly variable and unpredictable, which may negatively affect comparability between periods.

Current wording

•Stock-based compensation: Although stock-based compensation is a key incentive offered to our employees, we have excluded the effect of these expenses from the calculation of adjusted operating income (loss) and adjusted EBITDA. This is due to their primarily non-cash nature; in addition, the amount and timing of these expenses may be highly variable and unpredictable, which may negatively affect comparability between periods.

Previous wording

•Depreciation and Adjusted depreciation: Our adjusted operating income excludes the impact of accelerated depreciation for certain restructuring projects that affect the expected useful lives of Property, Plant and Equipment, as such charges vary significantly based on the size and timing of the programs. Further, we have excluded adjusted depreciation, which represents depreciation expense net of accelerated depreciation charges, from our adjusted EBITDA. Our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance.

Current wording

•Depreciation and Adjusted depreciation: Our adjusted operating income (loss) excludes the impact of accelerated depreciation for certain restructuring projects that affect the expected useful lives of Property, Plant and Equipment, as such charges vary significantly based on the size and timing of the programs. Further, we have excluded adjusted depreciation, which represents depreciation expense net of accelerated depreciation charges, from our adjusted EBITDA. Our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance.

Previous wording

•Other (income) expense: We have excluded the impact of pension curtailment (gains) and losses and pension settlements as such events are triggered by our restructuring and other business realignment activities and the amount of such charges vary significantly based on the size and timing of the programs. Further, we have excluded realized and unrealized gains and losses on the investment in Wella, as well as expenses related to potential or actual sales transactions reducing equity investments, as our management believes these gains and losses do not reflect our underlying ongoing business, and the adjustment of such impact helps investors and others compare and analyze performance from period to period. Such transactions do not reflect our operating results and we have excluded the impact as our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance.

Current wording

•Other (income) expense: We have excluded the impact of pension curtailment (gains) and losses and pension settlements as such events are triggered by our restructuring and other business realignment activities and the amount of such charges vary significantly based on the size and timing of the programs. Further, we have excluded realized and unrealized gains and losses on the investment in Wella, as our management believes these gainsand losses do not reflect our underlying ongoing business, and the adjustment of such impact helps investors and others compare and analyze performance from period to period. Such transactions do not reflect our operating results and we have excluded the impact as our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance.

Previous wording

•Tax: This adjustment represents the impact of the tax effect of the pretax items excluded from Adjusted net income. The tax impact of the non-GAAP adjustments is based on the tax rates related to the jurisdiction in which the adjusted items are received or incurred. Additionally, adjustments are made for the tax impact of any intra-entity transfer of assets and liabilities. Also, in connection with our market exit in Russia, we have adjusted for the release of tax charges previously taken related to certain direct incremental impacts of the decision.

Current wording

•Tax: This adjustment represents the impact of the tax effect of the pretax items excluded from Adjusted net income (loss). The tax impact of the non-GAAP adjustments is based on the tax rates related to the jurisdiction in which the adjusted items are received or incurred. Additionally, adjustments are made for the tax impact of any intra-entity transfer of assets and liabilities. Also, in connection with our market exit in Russia, we have adjusted for the release of tax charges previously taken related to certain direct incremental impacts of the decision.

Previous wording

In the three months ended March 31, 2026, net revenues decreased 1%, or $17.5, to $1,281.6 from $1,299.1 in the three months ended March 31, 2025, reflecting a decrease in unit volume of 8% (primarily driven by body care brands — mainly in Brazil — and color cosmetics), partially offset by a positive foreign currency exchange translation impact of 6% (primarily driven by the weakening of the U.S. dollar versus the Euro) and a positive price and mix impact of 1% (primarily driven by lower sales of lower-priced body care products in Brazil, partially offset by increased trade incentives related to prestige fragrances). The overall decrease in net revenues reflects sales declines within Consumer Beauty, largely due to lower mass fragrance sales across regions and lower color cosmetics sales primarily as a result of the negative performance of our brands in the United States market. Net revenues decreased in the Americas and EMEA, partially offset by an increase in the Asia Pacific region.

Current wording

In the three months ended September 30, 2026, net revenues decreased 1%, or $22.0, to $1,555.2 from $1,577.2 in the three months ended September 30, 2025, primarily as a result of a negative price and mix impact of 5% (primarily driven by prestige fragrances, color cosmetics and mass fragrance) partially offset by an increase in unit volume of 3% (primarily driven by prestige cosmetics and prestige fragrances), and reflecting a neutral foreign currency exchange translation impact. The overall decrease in net revenues reflects sales declines within Prestige and Consumer Beauty as described in detail below. Net revenues decreased in EMEA, partially offset by an increase in the Asia Pacific region.

Previous wording

In the three months ended March 31, 2026, net revenues from the Prestige segment increased$1.5 to $830.9 compared to $829.4 in the three months ended March 31, 2025, reflecting a positive foreign currency exchange translation impact of 5% (primarily driven by the weakening of the U.S. dollar versus the Euro) partially offset by a decrease in unit volume of 3% (primarily due to lower sales volume in prestige fragrances) and a negative price and mix impact of 3% (primarily due to increased trade incentives related to prestige fragrances). The increase in net revenues primarily reflects:

Current wording

In the three months ended September 30, 2026, net revenues from the Prestige segment decreased $11.1 to $1,058.4 compared to $1,069.5 in the three months ended September 30, 2025, primarily as a result of a negative price and mix impact of 6% (primarily driven by increased trade incentives related to prestige fragrances), partially offset by an increase in unit volume of 5% (primarily due to higher sales volume in prestige fragrances and cosmetics) and reflecting a neutral foreign currency exchange translation impact. The decrease in net revenues primarily reflects:

Previous wording

•Prestige skincare sales decline of $1.3.

Current wording

•Prestige skincare sales decline of $4.0.

Previous wording

•Color cosmetics sales declines of $9.2 due to a decline in sales led by the United States impacting net revenues from Covergirl; and

Current wording

•Color cosmetics sales declines of $11.4 due to a decline in sales primarily in Europe led by Rimmeland MaxFactor.

Previous wording

•Mass skincare sales increases of $6.7.

Current wording

•Mass skincare sales increases of $2.9.

Previous wording

In the three months ended March 31, 2026, cost of sales increased 5%, or $23.0, to $489.7 from $466.7 in the three months ended March 31, 2025. Cost of sales as a percentage of net revenues increased to 38.2% in the three months ended March 31, 2026 from 35.9% in the three months ended March 31, 2025, resulting in a gross margin decrease of approximately 230 basis points, primarily reflecting:

Current wording

In the three months ended September 30, 2026, cost of sales increased 2%, or $10.0, to $570.4 from $560.4 in the three months ended September 30, 2025. Cost of sales as a percentage of net revenues increased to 36.7% in the three months ended September 30, 2026 from 35.5% in the three months ended September 30, 2025, resulting in a gross margin decrease of approximately 120 basis points, primarily reflecting:

Previous wording

(iii)approximately 70 basis points increase related to excess and obsolescence costs as a percentage of net revenues.

Current wording

(i)approximately 60 basis points increase related to excess and obsolescence costs as a percentage of net revenues;

Previous wording

(ii)approximately 80 basis points related to increased freight costs as a percentage of net revenues, primarily driven by the impact of tariffs; and

Current wording

(ii)approximately 50 basis points related to increased freight costs as a percentage of net revenues, primarily driven by the impact of rising fuel surcharges; and

Previous wording

(i)approximately 100 basis points, primarily due to an increase in manufacturing and material costs as a percentage of net revenues;

Current wording

(iii)approximately 20 basis points, primarily due to an increase in manufacturing and material costs as a percentage of net revenues.

Previous wording

(iv)approximately 20 basis points related to decreased designer license fees as a percentage of net revenues.

Current wording

(iv)approximately 10 basis points related to decreased designer license fees as a percentage of net revenues.

Previous wording

In the three months ended March 31, 2026, selling, general and administrative expenses decreased 6%, or $50.5, to $727.0 from $777.5 in the three months ended March 31, 2025. Selling, general and administrative expenses as a percentage of net revenues decreased to 56.7% in the three months ended March 31, 2026 from 59.8% in the three months ended March 31, 2025, or approximately 310 basis points. This decrease primarily reflects:

Current wording

In the three months ended September 30, 2026, selling, general and administrative expenses decreased 2%, or $13.9, to $779.6 from $793.5 in the three months ended September 30, 2025. Selling, general and administrative expenses as a percentage of net revenues decreased to 50.1% in the three months ended September 30, 2026 from 50.3% in the three months ended September 30, 2025, or approximately 20 basis points. This decrease primarily reflects:

Previous wording

(ii)80 basis points due to favorable transactional impact from our exposure to foreign currency as a percentage of net revenues.

Current wording

(iii)20 basis points due to favorable transactional impact from our exposure to foreign currency as a percentage of net revenues.

Previous wording

(iv)120 basis points due to an increase in operational accruals as a percentage of net revenues.

Current wording

(iv)100 basis points due to an increase in operational accruals as a percentage of net revenues; and

Previous wording

(iii)190 basis points due to an increase in fixed costs as a percentage of net revenues due to an increase in administrative expense which includes an increase in discretionary compensation for employees; and

Current wording

(v)20 basis points due to an increase in fixed costs as a percentage of net revenues due to an increase in administrative expense.

Previous wording

In the nine months ended March 31, 2026, operating loss was $38.8 compared to income of $225.6 in the nine months ended March 31, 2025. Operating loss margin as a percentage of net revenues decreased to 0.9% in the nine months ended March 31, 2026 as compared to an operating income margin of 4.9% in the nine months ended March 31, 2025. The decrease in operating margin is largely driven by an increase in asset impairment charges (approximately 340 basis points), an increase in cost of goods sold (approximately 210 basis points), an increase in amortization expense as a percentage of net revenues (approximately 110 basis points), an increase in fixed costs as a percentage of net revenues (approximately 90 basis points), and an increase in advertising and consumer promotional costs as a percentage of net revenues (approximately 70 basis points), partially offset by a decrease in restructuring costs as a percentage of net revenue (approximately 160 basis points) and a decrease in other operating income as a percentage of net revenue (approximately 70 basis points).

Current wording

In the three months ended September 30, 2026, operating income was $170.4 compared to income of $185.0 in the three months ended September 30, 2025. Operating income margin worsened to 11.0% in the three months ended September 30, 2026 as compared to 11.7% in the three months ended September 30, 2025. The decrease in operating margin is primarily driven by an increase in cost of goods sold (approximately 115 basis points), an increase in other operating expenses as a percentage of net revenues (approximately 90 basis points) and an increase in fixed costs as a percentage of net revenues (approximately 20 basis points), partially offset by a decrease in advertising and consumer promotional costs as a percentage of net revenues (approximately 70 basis points), a decrease in stock compensation expense as a percentage of net revenues (approximately 40 basis points) and a decrease in amortization expense as a percentage of net revenues (approximately 30 basis points).

Previous wording

In the three months ended March 31, 2026, the operating loss for Corporate was $7.1 compared to a loss of $169.6 in the three months ended March 31, 2025, as described under “Adjusted Operating Income for Coty Inc.” below. The decrease in the operating loss for Corporate was primarily driven by a $86.7 decrease in restructuring and other business realignment costs, a loss on the termination of the KKW Collaboration Agreement in the prior period of $71.0, and a $5.2 decrease in stock-based compensation.

Current wording

In the three months ended September 30, 2026, the operating loss for Corporate was $16.5 compared to a loss of $16.2 in the three months ended September 30, 2025. The increase in the operating loss for Corporate was primarily driven by a $6.4 increase in restructuring and other business realignment costs and a $1.2 increase in loss (gain) on brand exit and early license termination costs, partially offset by a $7.3 decrease in stock-based compensation.

Previous wording

(a)See a reconciliation of reported net income to operating income (loss) to adjusted operating income (loss) and adjusted EBITDA for Coty Inc. and reconciliations of segment operating income (loss) to segment adjusted operating income (loss) and segment adjusted EBITDA for the Prestige, Consumer Beauty and Corporate segments with a description of the adjustments under “Net (Loss) Income, Adjusted Operating Income and Adjusted EBITDA for Coty Inc.” and “Segment Operating Income (Loss), Segment Adjusted Operating Income (Loss) and Segment Adjusted EBITDA”, below. All adjustments are reflected in Corporate, except for amortization and asset impairment charges on goodwill, indefinite-lived intangible assets, and finite-lived intangible assets, which are reflected in the Prestige and Consumer Beauty segments.

Current wording

(a)See a reconciliation of reported net income to operating income (loss) to adjusted operating income (loss) and adjusted EBITDA for Coty Inc. and reconciliations of segment operating income (loss) to segment adjusted operating income (loss) and segment adjusted EBITDA for the Prestige, Consumer Beauty and Corporate segments with a description of the adjustments under “Net Income, Adjusted Operating Income and Adjusted EBITDA for Coty Inc.” and “Segment Operating Income (Loss), Segment Adjusted Operating Income (Loss) and Segment Adjusted EBITDA”, below. All adjustments are reflected in Corporate, except for amortization and asset impairment charges on goodwill, indefinite-lived intangible assets, and finite-lived intangible assets, which are reflected in the Prestige and Consumer Beauty segments.

Previous wording

We believe that adjusted operating income further enhances an investor’s understanding of our performance. See “Overview—Non-GAAP Financial Measures.” Reconciliation of reported net loss to adjusted operating income and adjusted EBITDA is presented below:

Current wording

We believe that adjusted operating income further enhances an investor’s understanding of our performance. See “Overview—Non-GAAP Financial Measures.” Reconciliation of reported net income to adjusted operating income and adjusted EBITDA is presented below:

Previous wording

In the three months ended March 31, 2026, adjusted operating income decreased $75.5 to $72.4 from $147.9 in the three months ended March 31, 2025. Adjusted operating margin decreased to 5.6% of net revenues in the three months ended March 31, 2026 from 11.4% in the three months ended March 31, 2025. In the three months ended March 31, 2026, adjusted EBITDA decreased $77.2 to $127.0 from $204.2 in the three months ended March 31, 2025. Adjusted EBITDA margin decreased to 9.9% of net revenues in the three months ended March 31, 2026 from 15.7% in the three months ended March 31, 2025.

Current wording

In the three months ended September 30, 2026, adjusted operating income decreased $20.0 to $220.5 from $240.5 in the three months ended September 30, 2025. Adjusted operating margin decreased to 14.2% of net revenues in the three months ended September 30, 2026 from 15.2% in the three months ended September 30, 2025. In the three months ended September 30, 2026, adjusted EBITDA decreased $21.9 to $274.2 from $296.1 in the three months ended September 30, 2025. Adjusted EBITDA margin decreased to 17.6% of net revenues in the three months ended September 30, 2026 from 18.8% in the three months ended September 30, 2025.

Previous wording

Operating Loss, Adjusted Operating Loss and Adjusted EBITDA - Corporate Segment

Current wording

Operating Loss, Adjusted Operating Income and Adjusted EBITDA - Corporate Segment

Previous wording

•We incurred a credit in Restructuring costs of $0.4, which is included in the Condensed Consolidated Statements of Operations; and

Current wording

•We incurred a credit in Restructuring costs of $0.3, which is included in the Condensed Consolidated Statements of Operations; and

Previous wording

•We incurred business structure realignment costs of $0.9, which is reported in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

Current wording

•We incurred business structure realignment costs of $8.4, which is reported in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.