# Coty Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Coty Inc.](/companies/coty.md) (CIK 1024305)
- Form: 10-Q
- Filed: 2025-05-07
- Accepted by EDGAR: May 7, 2025, 16:03 ET
- Period: 2025-03-31
- Accession: 0001024305-25-000018
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1024305/000102430525000018/coty-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1024305/000102430525000018/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $1.30bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-07-01 to 2025-03-31 | $4.64bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $466.7m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2024-07-01 to 2025-03-31 | $1.60bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $832.4m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2024-07-01 to 2025-03-31 | $3.04bn | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $777.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2024-07-01 to 2025-03-31 | $2.38bn | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$280.4m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-07-01 to 2025-03-31 | $225.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $50.2m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 9 months, 2024-07-01 to 2025-03-31 | $167.3m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | −$58.4m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-07-01 to 2025-03-31 | $9.6m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$405.7m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-07-01 to 2025-03-31 | −$299.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.47 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-07-01 to 2025-03-31 | −$0.36 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.47 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-07-01 to 2025-03-31 | −$0.36 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 872,100,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-07-01 to 2025-03-31 | 870,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-07-01 to 2025-03-31 | $409.4m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2024-07-01 to 2025-03-31 | $166.7m | us-gaap:PaymentsToAcquireProductiveAssets |
| Cash and equivalents | at 2025-03-31 | $243.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $1.93bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $11.47bn | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $2.36bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $7.55bn | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $3.80bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $9.4m | us-gaap:DebtCurrent |
| Short-term borrowings | at 2025-03-31 | $5.1m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-03-31 | $3.50bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 130,379 characters.

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, 2024 (“Fiscal 2024 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.

All dollar amounts in the following discussion are in millions of United States (“U.S.”) dollars, unless otherwise indicated.

More information about potential risks and uncertainties that could affect our business and financial results is included under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q and other periodic reports we have filed and may file with the SEC from time to time.

### Forward-looking Statements

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 plans for growth in China, the expected impact of global supply chain challenges and/or inflationary pressures (including as a result of the war in Ukraine and/or armed conflict in the Middle East, or due to a change in tariffs or trade policy impacting raw materials) and expectations regarding future service levels and inventory levels, and the priorities of senior management. These forward-looking statements are generally identified by words or phrases, such as “anticipate”, “are going to”, “estimate”, “plan”, “project”, “expect”, “believe”, “intend”, “foresee”, “forecast”, “will”, “may”, “should”, “outlook”, “continue”, “temporary”, “target”, “aim”, “potential”, “goal” and similar words or phrases. These statements are based on certain assumptions and estimates that we consider reasonable, but are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual events or results (including our financial condition, results of operations, cash flows and prospects) to differ materially from such statements, including risks and uncertainties relating to:

- 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;
- 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), and our ability to effectively manage our production and inventory levels in response to demand;

- use of estimates and assumptions in preparing our financial statements, including with regard to revenue recognition, income taxes (including the expected timing and amount of the release of any tax valuation allowance), the assessment of goodwill, other intangible and long-lived assets for impairments, the market value of inventory, and the fair value of the equity investment;
- the impact of any future impairments;
- 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;
- the timing, costs and impacts of divestitures and the amount and use of proceeds from any such transactions;
- 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;
- 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);
- our and our joint ventures’, business partners’ and licensors’ abilities to obtain, maintain and protect the intellectual property used in our and their respective businesses, protect our and their respective reputations (including those of our and their executives or influencers) and public goodwill, and defend claims by third parties for infringement of intellectual property rights;
- any change to our capital allocation and/or cash management priorities, including any change in our dividend policy and any change in our stock repurchase plans;
- 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;
- our international operations and joint ventures, including enforceability and effectiveness of our joint venture agreements and reputational, compliance, regulatory, economic and foreign political risks, including difficulties and costs associated with maintaining compliance with a broad variety of complex local and international regulations;
- our dependence on certain licenses (especially in the fragrance category) and our ability to renew expiring licenses on favorable terms or at all;
- our dependence on entities performing outsourced functions, including outsourcing of distribution functions, and third-party manufacturers, logistics and supply chain suppliers, and other suppliers, including third-party software providers, web-hosting and e-commerce providers;
- administrative, product development and other difficulties in meeting the expected timing of market expansions, product launches, re-launches and marketing efforts, including in connection with new products in our skincare and prestige cosmetics portfolios;
- changes in the demand for our products due to declining or depressed global or regional economic conditions, and declines in consumer confidence or spending, whether related to the economy (such as austerity measures, tax increases, high fuel costs, or higher unemployment), wars and other hostilities and armed conflicts, natural or other disasters, weather, pandemics, security concerns, terrorist attacks or other factors;
- global political and/or economic uncertainties, disruptions or major regulatory or policy changes, and/or the enforcement thereof that affect our business, financial performance, operations or products, including the impact of the war in Ukraine and any escalation or expansion thereof, armed conflict in the Middle East, the current administration in the U.S. and related changes to regulatory and trade policies, changes in the U.S. tax code and/or tax regulations in other jurisdictions where we operate (including recent and pending implementation of the global minimum corporate tax (part of the “Pillar Two Model Rules”) that may impact our tax liability in the European Union (“EU”)), and recent changes and future changes in tariffs, retaliatory or trade protection measures, trade policies and other international trade regulations in the U.S., the EU, and Asia and in other regions where we operate (and our ability to manage the impact of such changes), potential regulatory limits on payment terms in the EU, future changes in sanctions regulations, recent and future changes in regulations impacting the beauty industry, including regulatory measures addressing products, formulations, raw materials and packaging, and recent and future regulatory measures restricting or otherwise impacting the use of web sites, mobile applications or social media platforms that we use in connection with our digital marketing and e-commerce activities;
- currency exchange rate volatility and currency devaluation and/or inflation;
- our ability to implement and maintain pricing actions to effectively mitigate increased costs and inflationary pressures, and the reaction of customers or consumers to such pricing actions;
- the number, type, outcomes (by judgment, order or settlement) and costs of current or future legal, compliance, tax, regulatory or administrative proceedings, investigations and/or litigation, including product liability cases (including asbestos and talc-related litigation for which indemnities and/or insurance may not be available), distributor or licensor litigation, and compliance, litigation or investigations relating to our joint ventures or strategic partnerships;
- our ability to manage seasonal factors and other variability and to anticipate future business trends and needs;
- disruptions in the availability and distribution of raw materials and components needed to manufacture our products, and our ability to effectively manage our production and inventory levels in response to supply challenges;
- 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;
- our ability to adapt our business to address climate change concerns, including through the implementation of new or unproven technologies or processes, and to respond to increasing governmental and regulatory measures relating to environmental, social and governance matters, including expanding mandatory and voluntary reporting, diligence and disclosure, as well as new taxes (including on energy and plastic), new diligence requirements and the impact of such measures or processes on our costs, business operations and strategy;
- 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;
- increasing dependency on information technology, including as a result of 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;
- our ability to attract and retain key personnel and the impact of senior management transitions;
- the distribution and sale by third parties of counterfeit and/or gray market versions of our products;
- the impact of our ongoing strategic transformation agenda and continued process improvements on our relationships with key customers and suppliers and certain material contracts;
- our relationship with JAB Beauty B.V., as our majority stockholder, and its affiliates, and any related conflicts of interest or litigation;
- our relationship with KKR, whose affiliate KKR Bidco, is an investor in the Wella Company, and any related conflicts of interest or litigation;
- future sales of a significant number of shares by our majority stockholder or the perception that such sales could occur; and
- other factors described elsewhere in this document and in documents that we file with the SEC from time to time.

More information about potential risks and uncertainties that could affect our business and financial results is included under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q and other periodic reports we have filed and may file with the SEC from time to time.

All forward-looking statements made in this document are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this document, and we do not undertake any obligation, other than as may be required by applicable law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.

Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance unless expressed as such, and should only be viewed as historical data.

### Industry, Ranking and Market Data

Unless otherwise indicated, information contained in this Quarterly Report on Form 10-Q concerning our industry and the markets in which we operate, including our general expectations about our industry, market position, market opportunity and market sizes, is based on data from various sources including internal data and estimates as well as third-party sources widely available to the public, such as independent industry publications, government publications, reports by market research firms or other published independent sources and on our assumptions based on that data and other similar sources. We did not fund and are not otherwise affiliated with the third-party sources that we cite. Industry publications and other published sources generally state that the information contained therein has been obtained from third-party sources believed to be reliable. Internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and management’s understanding of industry conditions, and such information has not been verified by any independent sources. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. While we generally believe the market, industry and other information included in this Quarterly Report on Form 10-Q to be the most recently available and to be reliable, such information is inherently imprecise and we have not independently verified any third-party information or verified that more recent information is not available.

Our fiscal year ends on June 30. Unless otherwise noted, any reference to a year preceded by the word “fiscal” refers to the fiscal year ended June 30 of that year. For example, references to “fiscal 2025” refer to the fiscal year ending June 30, 2025. Any reference to a year not preceded by “fiscal” refers to a calendar year.

### OVERVIEW

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.

#### Strategic Progress

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.

During the third quarter of fiscal 2025, we formulated a new plan, which was announced on April 24, 2025, to strengthen our operating model and simplify our fixed cost structure (the “Fixed Cost Reduction Plan”). Cash costs associated with the program include restructuring and business structure realignment costs and are expected to be approximately $80.0, roughly evenly split between fiscal 2026 and fiscal 2027.

#### Global Economic Landscape and Business Impact

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.

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 these costs 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.

#### Market Trends and Sales Performance

Changing market trends continue to impact sales of our products across and within product categories and geographic regions.

- *Fragrances*: In the first nine months of fiscal 2025, our fragrance category experienced mid-single digit percentage net revenue growth compared to the previous fiscal year, driven by high-single digit percentage but decelerating growth in the overall fragrance market. Net revenues from prestige fragrances increased by a low-single digit percentage in the first nine months of fiscal 2025, reflecting a deceleration in growth compared to the prior year, as the contribution from our fragrance innovation this fiscal year was more moderate than the contribution from major innovations in the previous fiscal year.
- *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.
- *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.
- *Geographic Regions*: Net revenues in the Americas declined by a mid-single digit percentage during the first nine months fiscal 2025, driven by softness within the color cosmetics market in the United States. Revenues from EMEA increased by a low-single digit percentage due to decelerating growth across most European markets. Net revenues in the Asia Pacific region declined by high-single digit percentage in the first nine months of fiscal 2025, impacted by China and a decline in sales in the Asia Travel Retail channel. Asia Travel Retail channel sales were negatively affected by regulatory restrictions in Asia aimed at formalizing cross-border shopping, which reduced *daigou* (surrogate shopping) purchases.

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

#### Financial Outlook

We expect that our reported net revenue for fiscal 2025 will decline in the mid-single digit percentage versus the prior year, which includes an estimated low-single digit percentage negative impact of foreign exchange. We anticipate that our annual gross margin will remain in the mid-sixties, providing us with opportunities to fund new product initiatives and support our brands through advertising and consumer promotional investments. In anticipation of a more uncertain demand backdrop, including cautious retailer behavior and a complex macroeconomic environment, we are re-accelerating our cost reduction efforts across to deliver savings of approximately $120.0 in fiscal 2025. We continue to target advertising and consumer promotional spending in the high-twenties percentage of net revenues. However, our level of advertising and consumer promotional spending will depend on various factors, including seasonality, the timing of product launches, and budgetary considerations.

#### Non-GAAP Financial Measures

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.

Despite the limitations of these non-GAAP financial measures, our management uses the Adjusted Performance Measures as key metrics in the evaluation of our performance and annual budgets and to benchmark performance of our business against our competitors. The following are examples of how these Adjusted Performance Measures are utilized by our management:

- strategic plans and annual budgets are prepared using the Adjusted Performance Measures;
- senior management receives a monthly analysis comparing budget to actual operating results that is prepared using the Adjusted Performance Measures; and
- senior management’s annual compensation is calculated, in part, by using some of the Adjusted Performance Measures.

In addition, our financial covenant compliance calculations under our debt agreements are substantially derived from these Adjusted Performance Measures.

Our management believes that Adjusted Performance Measures are useful to investors in their assessment of our operating performance and the valuation of the Company. In addition, these non-GAAP financial measures address questions we routinely receive from analysts and investors and, in order to ensure that all investors have access to the same data, our management has determined that it is appropriate to make this data available to all investors. The Adjusted Performance Measures exclude the impact of certain items (as further described below) and provide supplemental information regarding our operating performance. By disclosing these non-GAAP financial measures, our management intends to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We provide disclosure of the effects of these non-GAAP financial measures by presenting the corresponding measure prepared in conformity with GAAP in our financial statements, and by providing a reconciliation to the corresponding GAAP measure so that investors may understand the adjustments made in arriving at the non-GAAP financial measures and use the information to perform their own analyses.

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.

Adjusted Performance Measures reflect adjustments based on the following items:

- Costs related to acquisition and divestiture activities: We have excluded acquisition- and divestiture-related costs and the accounting impacts such as those related to transaction costs and costs associated with the revaluation of acquired inventory in connection with business combinations because these costs are unique to each transaction. Additionally, for divestitures, we exclude write-offs of assets that are no longer recoverable and contract related costs due to the divestiture. The nature and amount of such costs vary significantly based on the size and timing of the acquisitions and divestitures, and the maturities of the businesses being acquired or divested. Also, the size, complexity and/or volume of past transactions, which often drives the magnitude of such expenses, may not be indicative of the size, complexity and/or volume of any future acquisitions or divestitures.
- Restructuring and other business realignment costs: We have excluded costs associated with restructuring and business structure realignment programs to allow for comparable financial results to historical operations and forward-looking guidance. In addition, the nature and amount of such charges vary significantly based on the size and timing of the programs. By excluding the referenced expenses from our non-GAAP financial measures, our management is able to further evaluate our ability to utilize existing assets and estimate their long-term value. Furthermore, 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.
- Asset impairment charges: We have excluded the impact of asset impairments as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. 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.
- Amortization expense: We have excluded the impact of amortization of finite-lived intangible assets, as such non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. 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. Although we exclude amortization of intangible assets from our non-GAAP expenses, our management believes that it is important for investors to understand that such intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets.
- 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.
- Costs related to market exit: We have excluded the impact of direct incremental costs related to our decision to wind down our business operations in Russia. We believe that these direct and incremental costs are inconsistent and infrequent in nature. Consequently, 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.
- Gains on sale of real estate: We have excluded the impact of gains on sale of real estate as such amounts are inconsistent in amount and frequency and are significantly impacted by the size of the sale. 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.
- 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.

- 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.
- 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 the change in fair value of the investment in Wella, as well as expenses related to potential or actual sales transactions reducing equity investments, as our management believes these unrealized (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.
- Noncontrolling interest: This adjustment represents the after-tax impact of the non-GAAP adjustments included in Net income attributable to noncontrolling interests based on the relevant noncontrolling interest percentage.
- 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.

#### Constant Currency

We operate on a global basis, with the majority of our net revenues generated outside of the U.S. Accordingly, fluctuations in foreign currency exchange rates can affect our results of operations. Therefore, to supplement financial results presented in accordance with GAAP, certain financial information is presented in “constant currency”, excluding the impact of foreign currency exchange translations to provide a framework for assessing how our underlying businesses performed excluding the impact of foreign currency exchange translations. Constant currency information compares results between periods as if exchange rates had remained constant period-over-period. We calculate constant currency information by translating current and prior-period results for entities reporting in currencies other than U.S. dollars into U.S. dollars using prior year foreign currency exchange rates. The constant currency calculations do not adjust for the impact of revaluing specific transactions denominated in a currency that is different to the functional currency of that entity when exchange rates fluctuate. The constant currency information we present may not be comparable to similarly titled measures reported by other companies.

#### Basis of Presentation of Acquisitions, Divestitures, Terminations or Market Exit

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.

| Period of acquisition, divestiture, termination | Acquisition, divestiture, termination | Impact on basis of first, second and third quarter 2025/2024 presentation |
| --- | --- | --- |
| **Third quarter fiscal 2024** | Termination: Lacoste | First and second quarter fiscal 2024 net revenue excluded. |

41

### THREE MONTHS ENDED MARCH 31, 2025 AS COMPARED TO THREE MONTHS ENDED MARCH 31, 2024

NET REVENUES

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.

Digital and e-commerce channel sales declines also contributed to the decrease in net revenues.

### Net Revenues by Segment

*(in millions)*

| NET REVENUES | Three Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | ---: |
| Prestige | $829.4 | $867.2 | (4)% |
| Consumer Beauty | 469.7 | 518.4 | (9)% |
| **Total** | **$1,299.1** | **$1,385.6** | **(6)%** |

#### Prestige

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:

- 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
- Prestige fragrance sales declines of $12.9, primarily due to the expiration of the *Roberto Cavalli* license in the prior year and negative performance of *Calvin Klein* and *Marc Jacobs. Calvin Klein* net revenue was negatively impacted by a reduction in certain channel sales and *Marc Jacobs* net revenue was negatively impacted by lower sales within the United States after lapping the *Marc Jacobs Daisy Wild* launch in the same period last year. The category sales decline was partially offset by successful performance of *Gucci* and *Chloe* from existing brand lines and due to successful innovations such as *Kylie Cosmic 2.0* and *Burberry Hero EDP Intense*. The overall category sales growth from existing brand lines reflect positive but decelerating market trends in North America and Europe.
- Prestige skincare sales declines of $4.3.

#### Consumer Beauty

In the three months ended March 31, 2025, net revenues from the Consumer Beauty segment decreased 9%, or $48.7, to $469.7 from $518.4 in the three months ended March 31, 2024, reflecting a negative price and mix impact of 5% (primarily due to negative mix impact from a higher proportion of the net revenues coming from lower priced Brazilian brands and higher discounts and returns in the current period) and a negative foreign currency exchange translation impact of 4% (primarily driven by the weakening of the Brazilian Real versus the U.S. dollar). Volumes for the segment were roughly flat, supported by volume growth in the Brazil skincare and body care categories. Excluding the contribution from the Brazilian brands, the Consumer Beauty segment experienced a decline in sales volume primarily in the color cosmetics category. The decrease in net revenues primarily reflects:

- Color cosmetics sales decline of $54.2, primarily due to negative market trends in the color cosmetics market in the United States which impacted net revenues from *Sally Hansen* and *Covergirl.* The category sales decline can also be attributed to negative market trends in several European markets. Category net revenue declines were also impacted by increased discounts and returns compared to the prior period; and
- Mass body care decline of $7.3.

These decreases were partially offset by:

- Mass fragrance sales growth of $8.5; and
- Mass skincare sales growth of $4.3.

COST OF SALES

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:

(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

(ii) approximately 20 basis points related to an increase in designer license fees due to licensed Prestige brands comprising a larger portion of overall net revenues in the current period and expanded Consumer Beauty collections under licensed brands driving increased license fees.

These increases were partially offset by:

(i) approximately 20 basis points related to decreased excess and obsolescence costs.

The above reflects a positive impact from pricing net of inflation of approximately 50 basis points.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

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:

(i) 550 basis points due to the loss on the termination of the KKW Collaboration Agreement in the current period;

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

(iii) 30 basis points due to an increase in advertising and consumer promotional costs as a percentage of net revenues; and

(iv) 20 basis points due to an increase in bad debt expense as a percentage of net revenues.

These increases were partially offset by the following decreases:

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

(ii) 50 basis points due to a decrease in stock-based compensation expense primarily related to a reduction in expense recognized in connection with awards granted to the CEO; and

(iii) 20 basis points due to a decrease in logistics costs as a percentage of net revenues.

OPERATING (LOSS)/INCOME

In the three months ended March 31, 2025, operating loss was $280.4 compared to income of $77.8 in the three months ended March 31, 2024. Operating loss margin, decreased to (21.6)% in the three months ended March 31, 2025 as compared to operating income margin of 5.6% in the three months ended March 31, 2024. The decrease in operating margin is primarily driven by an increase in asset impairment charges (approximately 1,640 basis points), higher restructuring costs in the current period (approximately 580 basis points), a loss on the termination of the KKW Collaboration Agreement (approximately 550 basis points), unfavorable transactional impact from our exposure to foreign currency (approximately 90 basis points), increase in cost of goods sold as a percentage of net revenues (approximately 70 basis points), an increase in advertising and consumer promotional costs as a percentage of net revenues (approximately 30 basis points), an increase in bad debt expense as a percentage of net revenues (approximately 20 basis points), partially offset by a decrease in fixed costs as a percentage of net revenues (approximately 240 basis points) primarily related to decreased discretionary compensation for employees, 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. In addition, a greater proportion of total sales came from higher margin Prestige brands in the current period which positively benefited our operating margin.

### Operating Income (Loss) by Segment

*(in millions)*

| Operating income (loss) | Three Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | --- |
| Prestige | $78.7 | $108.7 | (28)% |
| Consumer Beauty | (189.5) | (13.3) | \<(100%) |
| Corporate | (169.6) | (17.6) | \<(100%) |
| **Total** | **$(280.4)** | **$77.8** | **\<(100%)** |

#### Prestige

In the three months ended March 31, 2025, operating income for Prestige was $78.7 compared to income of $108.7 in the three months ended March 31, 2024. Operating margin decreased to 9.5% of net revenues in the three months ended March 31, 2025 as compared to 12.5% in the three months ended March 31, 2024, driven by an increase in asset impairment charges (approximately 520 basis points), unfavorable transactional impact from our exposure to foreign currency (approximately 80 basis points), an increase in advertising and consumer promotional costs as a percentage of net revenues (approximately 40 basis points), partially offset by a decrease in fixed costs as a percentage of net revenues primarily related to decreased discretionary compensation for employees (approximately 310 basis points), and a decrease in cost of goods sold as a percentage of net revenues (approximately 20 basis points.

#### Consumer Beauty

In the three months ended March 31, 2025, operating loss for Consumer Beauty was $189.5 compared to loss of $13.3 in the three months ended March 31, 2024. Operating loss margin decreased to (40.3)% of net revenues in the three months ended March 31, 2025 as compared to (2.6)% in the three months ended March 31, 2024, driven by an increase in asset impairment charges (approximately 3620 basis points), an increase in cost of goods sold as a percentage of net revenues (approximately 230 basis points), an increase in miscellaneous expense primarily related to unfavorable transactional impact from our exposure to foreign currency and other miscellaneous accruals (approximately 200 basis points), partially offset by a decrease in fixed costs as a percentage of net revenues primarily related to decreased discretionary compensation for employees (approximately 270 basis points). Our Consumer Beauty operating income margin was negatively impacted by a higher proportion of Consumer Beauty net revenues generated by the lower margin brands from our Brazilian business.

#### Corporate

Corporate primarily includes income and expenses not directly relating to our operating activities. These items are included in Corporate since we consider them to be Corporate responsibilities, and these items are not used by our management to measure the underlying performance of the segments.

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.

### Adjusted Operating Income (Loss) by Segment

We believe that adjusted operating income by segment further enhances an investor’s understanding of our performance. See “Overview—Non-GAAP Financial Measures.” A reconciliation of reported operating income to adjusted operating income is presented below, by segment:

*(in millions)*

| Operating income | Three Months Ended March 31, 2025 Reported (GAAP) | Adjustments (a) | Adjusted (Non-GAAP) |
| --- | ---: | ---: | ---: |
| Prestige | $78.7 | $80.1 | $158.8 |
| Consumer Beauty | (189.5) | 178.6 | (10.9) |
| Corporate | (169.6) | 169.6 | — |
| **Total** | **$(280.4)** | **$428.3** | **$147.9** |
|  | **Three Months Ended March 31, 2024** |  |  |
| **(in millions)** | **Reported (GAAP)** | **Adjustments (a)** | **Adjusted (Non-GAAP)** |
| **Operating income** |  |  |  |
| Prestige | $108.7 | $38.6 | $147.3 |
| Consumer Beauty | (13.3) | 9.9 | (3.4) |
| Corporate | (17.6) | 17.6 | — |
| **Total** | **$77.8** | **$66.1** | **$143.9** |

(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.

### Net Income, Adjusted Operating Income and Adjusted EBITDA for Coty Inc.

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:

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | --- |
| **Net (loss) income** | **$(402.2)** | **$8.8** | **\<(100%)** |
| Net (loss) income margin | (31.0)% | 0.6% |  |
| Benefit for income taxes | (58.4) | (5.4) | \<(100%) |
| **(Loss) income before income taxes** | **$(460.6)** | **$3.4** | **\<(100%)** |
| Interest expense, net | 47.9 | 60.4 | (21)% |
| Other expense, net | 132.3 | 14.0 | \>100% |
| **Reported operating (loss) income** | **$(280.4)** | **$77.8** | **\<(100%)** |
| Reported operating (loss) income margin | (21.6)% | 5.6% |  |
| Amortization expense | 45.9 | 48.5 | (5)% |
| Restructuring and other business realignment costs | 87.2 | (1.7) | \>100% |
| Stock-based compensation | 12.1 | 20.5 | (41)% |
| Early license termination and market exit costs | 70.3 | (1.2) | \>100% |
| Asset impairment charges | 212.8 | — | N/A |
| Total adjustments to reported operating income | $428.3 | $66.1 | \>100% |
| **Adjusted operating income** | **$147.9** | **$143.9** | **3%** |
| Adjusted operating income margin | 11.4% | 10.4% |  |
| Adjusted depreciation | 56.3 | 56.0 | 1% |
| **Adjusted EBITDA** | **$204.2** | **$199.9** | **2%** |
| Adjusted EBITDA margin | 15.7% | 14.4% |  |

In the three months ended March 31, 2025, adjusted operating income increased $4.0 to $147.9 from $143.9 in the three months ended March 31, 2024. Adjusted operating margin increased to 11.4% of net revenues in the three months ended March 31, 2025 from 10.4% in the three months ended March 31, 2024. In the three months ended March 31, 2025, adjusted EBITDA increased $4.3 to $204.2 from $199.9 in the three months ended March 31, 2024. Adjusted EBITDA margin increased to 15.7% of net revenues in the three months ended March 31, 2025 from 14.4% in the three months ended March 31, 2024.

### Segment Operating Income (Loss), Segment Adjusted Operating Income (Loss) and Segment Adjusted EBITDA

#### Operating Income, Adjusted Operating Income and Adjusted EBITDA - Prestige Segment

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | ---: |
| **Reported operating income** | **$78.7** | **$108.7** | **(28)%** |
| Reported operating income margin | 9.5% | 12.5% |  |
| Amortization expense | 37.2 | 38.6 | (4)% |
| Asset impairment charges | 42.9 | — | N/A |
| Total adjustments to reported operating income | $80.1 | $38.6 | \>100% |
| **Adjusted operating income** | **$158.8** | **$147.3** | **8%** |
| Adjusted operating income margin | 19.1% | 17.0% |  |
| Adjusted depreciation | 27.1 | 25.7 | 5% |
| **Adjusted EBITDA** | **$185.9** | **$173.0** | **7%** |
| Adjusted EBITDA margin | 22.4% | 19.9% |  |

#### Operating Loss, Adjusted Operating Loss and Adjusted EBITDA - Consumer Beauty Segment

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | --- |
| **Reported operating loss** | **$(189.5)** | **$(13.3)** | **\<(100%)** |
| Reported operating loss margin | (40.3)% | (2.6)% |  |
| Amortization expense | 8.7 | 9.9 | (12)% |
| Asset impairment charges | 169.9 | — | N/A |
| Total adjustments to reported operating income | $178.6 | $9.9 | \>100% |
| **Adjusted operating loss** | **$(10.9)** | **$(3.4)** | **\<(100%)** |
| Adjusted operating loss margin | (2.3)% | (0.7)% |  |
| Adjusted depreciation | 29.2 | 30.3 | (4)% |
| **Adjusted EBITDA** | **$18.3** | **$26.9** | **(32)%** |
| Adjusted EBITDA margin | 3.9% | 5.2% |  |

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

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | --- |
| **Reported operating loss** | **$(169.6)** | **$(17.6)** | **\<(100%)** |
| Reported operating loss margin | N/A | N/A |  |
| Restructuring and other business realignment costs | 87.2 | (1.7) | \>100% |
| Stock-based compensation | 12.1 | 20.5 | (41)% |
| Early license termination and market exit costs | 70.3 | (1.2) | \>100% |
| Total adjustments to reported operating income | $169.6 | $17.6 | \>100% |
| **Adjusted operating income** | **$—** | **$—** | **N/A** |
| Adjusted operating income margin | N/A | N/A |  |
| Adjusted depreciation | — | — | N/A |
| **Adjusted EBITDA** | **$—** | **$—** | **N/A** |
| Adjusted EBITDA margin | N/A | N/A |  |

47

#### Amortization Expense

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.

#### Restructuring and Other Business Realignment Costs

During the third quarter of fiscal 2025, we formulated a new plan, which was announced on April 24, 2025, to strengthen our operating model and simplify our fixed cost structure (the “Fixed Cost Reduction Plan”). Cash costs associated with the program include restructuring and business structure realignment costs and are expected to be approximately $80.0, roughly evenly split between fiscal 2026 and fiscal 2027.

In the three months ended March 31, 2025, we incurred restructuring and other business structure realignment costs of $87.2 as follows:

- We incurred restructuring costs of $76.6, of which $74.4 related to the Fixed Cost Reduction Plan included in the Condensed Consolidated Statements of Operations; and
- 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.

In the three months ended March 31, 2024, we incurred a credit in restructuring and other business structure realignment costs of $(1.7) as follows:

- We incurred restructuring costs of $0.9 primarily related to the Restructuring Actions, included in the Condensed Consolidated Statements of Operations; and
- We incurred a credit in business structure realignment costs of $(2.6), which is reported in selling, general and administrative expenses.

#### Stock-Based Compensation

In the three months ended March 31, 2025, stock-based compensation was $12.1 as compared with $20.5 in the three months ended March 31, 2024. The decrease in stock-based compensation is primarily related to a reduction in expense recognized in connection with awards granted to the CEO.

#### Early License Termination and Market Exit Costs

In the three months ended March 31, 2025, we incurred a net loss of $71.0 related to the loss on the termination of the KKW Collaboration Agreement and recognized a gain of $(0.7) related to our decision to wind down our business in Russia.

In the three months ended March 31, 2024, we recognized a gain of $(1.2) related to our decision to wind down our business in Russia.

#### Asset Impairment Charges

In the three months ended March 31, 2025, we incurred $212.8 of asset impairment charges of which $84.0, $61.0, and $24.9 related to the *Max Factor, CoverGirl* and *Bourjois* trademarks, respectively, totaling $169.9 within the Consumer Beauty segment and $42.9 related to the *philosophy* trademark within the Prestige Segment.

In the three months ended March 31, 2024, we did not incur any asset impairment charges.

#### Adjusted Depreciation Expense

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.

INTEREST EXPENSE, NET

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.

OTHER EXPENSE

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.

Other expense of $132.3 in the three months ended March 31, 2025 was principally comprised of net losses on forward repurchase contracts of $78.5 and equity investment related impacts of $53.0.

Other expense of $14.0 in the three months ended March 31, 2024 was principally comprised of net losses on forward repurchase contracts of $17.2.

The increase in Other expense of $118.3 is primarily due to higher net losses on forward repurchase contracts of $61.3 compared to the prior year period and higher losses from equity investments of $53.0 as a result of an unfavorable fair market value adjustment related to our equity investment in Wella in the current period.

INCOME TAXES

The effective income tax rate for the three months ended March 31, 2025 and 2024 was 12.7% and (158.8)%, respectively. The increase in the effective tax rate was primarily attributable to a capital loss realized on the sale of the Company’s investment in KKW Holdings during the period for which no tax benefit can be recognized, the loss on forward repurchase contracts having a higher proportional impact in the current period, as well as the impact of fair value losses related to the investment in Wella taxed at a rate below the statutory rate of 21%.

The effective tax rate of 12.7% for the three months ended March 31, 2025, results from reporting losses before income taxes and a benefit for income taxes. The effective rate was lower than the Federal statutory rate of 21% primarily due to a capital loss realized on the sale of the Company’s investment in KKW Holdings during the period for which no tax benefit can be recognized, the loss on forward repurchase contracts having a higher proportional impact in the current period, as well as the impact of fair value losses related to the investment in Wella taxed at a rate below the statutory rate of 21%

The effective tax rate of (158.8)% in the three months ended March 31, 2024 results from reporting income before taxes and a benefit for income taxes. The effective rate was lower than the statutory tax rate of 21% primarily due to a benefit of $8.5 on the resolution of foreign uncertain tax positions compared to $3.4 of income in the period.

The effective income tax rates vary from the U.S. federal statutory rate of 21% due to the effect of (i) jurisdictions with different statutory rates, including impacts of rate changes, (ii) adjustments to the Company’s unrealized tax benefits (“UTBs”) and accrued interest, (iii) non-deductible expenses, (iv) audit settlements and (v) valuation allowance changes. Our effective tax rate could fluctuate significantly and could be adversely affected to the extent earnings are lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates.

### Reconciliation of Reported Income Before Income Taxes to Adjusted Income Before Income Taxes and Effective Tax Rates:

*(in millions)*

|  | Three Months Ended March 31, 2025 Income Before Income Taxes | (Benefit) Provision for Income Taxes | Effective Tax Rate | Three Months Ended March 31, 2024 Income Before Income Taxes | (Benefit) Provision for Income Taxes | Effective Tax Rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Reported income before income taxes** | **$(460.6)** | **$(58.4)** | **12.7%** | **$3.4** | **$(5.4)** | **(158.8)%** |
| Adjustments to reported operating income (a) | 428.3 |  |  | 66.1 |  |  |
| Change in fair value of investment in Wella Company (c) | 53.0 |  |  | (3.0) |  |  |
| Other adjustments (d) | 0.8 |  |  | 0.2 |  |  |
| Total Adjustments (b) | 482.1 | 64.6 |  | 63.3 | 18.3 |  |
| **Adjusted income before income taxes** | **$21.5** | **$6.2** | **28.8%** | **$66.7** | **$12.9** | **19.3%** |

(a) See a description of adjustments under “Net Income, Adjusted Operating Income and Adjusted EBITDA for Coty Inc.”

(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.

(c) The amount represents the unrealized (gain) loss recognized for the change in fair value of the investment in the Wella Company.

(d) For the three months ended March 31, 2025, this primarily represents recovery of previously written-off non-income tax credits, the amortization of basis differences in certain equity method investments, and net loss on the sale of an equity investment. For the three months ended March 31, 2024, this primarily represents loss from our equity investment in KKW.

The adjusted effective tax rate was 28.8% for the three months ended March 31, 2025 compared to 19.3% for the three months ended March 31, 2024. The difference is primarily due to the loss on forward repurchase contracts having a higher proportional impact in the current period.

NET INCOME (LOSS) ATTRIBUTABLE TO COTY INC.

Net loss attributable to Coty Inc. was $405.7 in the three months ended March 31, 2025 as compared to net income of $3.8 in the three months ended March 31, 2024. The increase in the loss was primarily driven by asset impairment charges of $212.8, higher restructuring costs of $75.7, a loss on the termination of the KKW Collaboration Agreement of $71.0 in the current period, higher net losses on forward repurchase contracts of $61.3, higher losses from equity investments of $53.0 as a result of an unfavorable fair market value adjustment in the current period, partially offset by a higher benefit for income taxes of $53.0 and lower interest expense of $12.5 in the current period.

We believe that adjusted net income attributable to Coty Inc. provides an enhanced understanding of our performance. See “Overview—Non-GAAP Financial Measures.”

*(in millions)*

|  | Three Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | --- |
| **Net (loss) income attributable to Coty Inc.** | **$(405.7)** | **$3.8** | **\<(100%)** |
| Convertible Series B Preferred Stock dividends (a) | (3.3) | (3.3) | —% |
| **Reported net (loss) income attributable to common stockholders** | **$(409.0)** | **$0.5** | **\<(100%)** |
| % of net revenues | (31.5)% | —% |  |
| Adjustments to reported operating income (b) | 428.3 | 66.1 | \>100% |
| Change in fair value of investment in Wella Company (c) | 53.0 | (3.0) | \>100% |
| Adjustment to other expense (d) | 0.8 | 0.2 | \>100% |
| Adjustments to noncontrolling interests (e) | (1.7) | (1.7) | —% |
| Change in tax provision due to adjustments to reported net income (loss) attributable to Coty Inc. | (64.6) | (18.3) | \<(100%) |
| **Adjusted net (loss) income attributable to Coty Inc.** | **$6.8** | **$43.8** | **(84)%** |
| % of net revenues | 0.5% | 3.2% |  |
| **Per Share Data** |  |  |  |
| Adjusted weighted-average common shares |  |  |  |
| Basic | 872.1 | 883.1 |  |
| Diluted (a) | 875.0 | 892.0 |  |
| Adjusted net income attributable to Coty Inc. per common share |  |  |  |
| Basic | $0.01 | $0.05 |  |
| Diluted (a) | $0.01 | $0.05 |  |

(a) Adjusted Diluted EPS is adjusted by the effect of dilutive securities. For the three months ended March 31, 2025 and 2024, no dilutive shares of the Forward Repurchase Contracts were included in the computation of adjusted diluted EPS as their inclusion would be anti-dilutive. Accordingly, we did not reverse the impact of the fair market value losses for contracts with the option to settle in shares or cash of $60.1 and $7.1, respectively. For the three months ended March 31, 2025 and 2024, Convertible Series B Preferred Stock (23.7 million weighted average dilutive shares) was anti-dilutive. Accordingly, we excluded these shares from the diluted shares and did not adjust the earnings for the related dividend of $3.3.

(b) See a description of adjustments under “Net Income, Adjusted Operating Income and Adjusted EBITDA for Coty Inc."

(c) The amount represents the unrealized (gain) loss recognized for the change in fair value of the investment in the Wella Company.

(d) For the three months ended March 31, 2025, this primarily represents recovery of previously written-off non-income tax credits, the amortization of basis differences in certain equity method investments, and net loss on the sale of an equity investment. For the three months ended March 31, 2024, this primarily represents adjustments for equity loss from KKW.

(e) The amounts represent the after-tax impact of the non-GAAP adjustments included in net income attributable to noncontrolling interests based on the relevant noncontrolling interest percentage in the Condensed Consolidated Statements of Operations.

### NINE MONTHS ENDED MARCH 31, 2025 AS COMPARED TO NINE MONTHS ENDED MARCH 31, 2024

NET REVENUES

In the nine months ended March 31, 2025, net revenues decreased 2%, or $114.1, to $4,640.5 from $4,754.6 in the nine months ended March 31, 2024. Excluding net revenue from the first and second quarters of the prior period from Lacoste, net revenues decreased 2%, decreasing $85.5 to $4,640.5 from $4,726.0 in the nine months ended March 31, 2024, reflecting a negative foreign currency exchange translation impact of 2% (primarily driven by the weakening of the Brazilian Real versus the U.S. dollar) and a decrease in unit volume of 2% (primarily due to body care brands from *Monange* in Brazil as a result of competitive pricing action in the deodorant market), partially offset by a positive price and mix impact of 2% (primarily due to positive pricing impact as a result of prior year period and current year period price increases and in line with the overall premiumization strategy). 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, across several European markets— and as a result of a decline in the Travel Retail Asia channel as a result of regulations impacting surrogate shopping purchases. The decline can also be attributed to mass bodycare in Brazil— primarily due to competitive pricing action in the Brazilian deodorant market— and from Prestige skincare primarily due to negative performance from our brands. These declines were partially offset by growth in our prestige and mass fragrance categories due to the positive but decelerating market trends in most major markets and geographical expansion of certain brands. Net revenues declined in the Americas and Asia Pacific but grew within Europe, the Middle East and Africa.

Digital and e-commerce channel sales declines also contributed to the decrease in net revenues.

### Net Revenues by Segment

*(in millions)*

| NET REVENUES | Nine Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | ---: |
| Prestige | $3,059.6 | $3,054.5 | —% |
| Consumer Beauty | 1,580.9 | 1,700.1 | (7)% |
| **Total** | **$4,640.5** | **$4,754.6** | **(2)%** |

#### Prestige

In the nine months ended March 31, 2025, net revenues from the Prestige segment remained relatively flat, or increased $5.1, to $3,059.6 from $3,054.5 in the nine months ended March 31, 2024. Excluding net revenue from the first and second quarters of the prior period from Lacoste, net revenues from the Prestige segment increased 1% or $33.7 to $3,059.6 from $3,025.9 in the nine months ended March 31, 2024, reflecting a positive price and mix impact of 3% (primarily due to positive pricing impact as a result of prior year period and current year period price increases and in line with the overall premiumization strategy), partially offset by a decrease in unit volume of 1% (primarily due to negative performance for Prestige cosmetics brands) and negative foreign currency exchange translation impact of 1%. The increase in net revenues primarily reflects:

- Prestige fragrance sales growth of $89.2, due to successful performance of *Burberry, Chloe, Gucci and Hugo Boss* from existing fragrance lines. In addition, continued brand innovation such as *Gucci Flora Gorgeous Orchid, Burberry Goddess Intense, Chloe Signature Intense, Boss Bottled Absolu, Kylie Cosmic 2.0*, and *Burberry Hero EDP Intense* contributed to the category sales growth. The category sales growth was partially offset by declines in *Calvin Klein* due to a reduction in certain channel sales and tight inventory management from certain retailers, declines in *Tiffany & Co.* as a result of negative performance and no innovation in the current period, declines in *philosophy* resulting from negative performance, as well as due to the expiration of the *Roberto Cavalli* license in the prior year. The overall category sales growth from existing brands can also be attributed to positive but decelerating market trends in most major markets.

These increases were partially offset by:

- Prestige cosmetic sales declines of $41.9, primarily due to declines in sales volume in the Asia Travel Retail channel from *Gucci* makeup as a result of regulations impacting the surrogate shopping purchases and declines in sales form *Kylie* makeup as a result of less innovations and negative market trends in the category*; and*
- Prestige skincare sales declines of $13.6, primarily due to negative performance from *philosophy.*

#### Consumer Beauty

In the nine months ended March 31, 2025, net revenues from the Consumer Beauty segment decreased 7%, or $119.2, to $1,580.9 from $1,700.1 in the nine months ended March 31, 2024, reflecting a negative foreign currency exchange translation impact of 4% (primarily driven by the weakening of the Brazilian Real versus the U.S. dollar), a negative price and mix impact of 1% (primarily due to higher returns and discounts and promotions in the current period) and a decrease in unit volume of 2% (primarily due to body care brands in Brazil). The decrease in net revenues primarily reflects:

- Color cosmetics sales declines of $111.6, primarily due to negative market trends in the color cosmetics market in the United States which impacted net revenues from *Covergirl, Sally Hansen,* and *Rimmel.* Negative market trends for color cosmetics in several European markets also impacted net revenues from *Max Factor, Bourjois*, and *Rimmel*. Category net sales declines were also impacted by increased discounts and promotions compared to the prior period; and
- 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.

These decreases were partially offset by:

- Mass fragrance sales growth of $34.1, due to geographical expansion of existing products from *Nautica* into growth-engine markets and brand innovation such as *adidas Vibes*; and
- Mass skincare sales growth of $6.8.

COST OF SALES

In the nine months ended March 31, 2025, cost of sales decreased 5%, or $91.5, to $1,599.3 from $1,690.8 in the nine months ended March 31, 2024. Cost of sales as a percentage of net revenues decreased to 34.5% in the nine months ended March 31, 2025 from 35.6% in the nine months ended March 31, 2024 resulting in a gross margin increase of approximately 110 basis points primarily reflecting:

(i) approximately 70 basis points related to a decrease in manufacturing and material costs as a percentage of net revenues, driven by increased manufacturing efficiencies, improvements in productivity, as well as procurement and material cost optimization; and

(ii) approximately 50 basis points related to an decrease in excess and obsolescence costs.

The above reflects a positive impact from pricing net of inflation of approximately 80 basis points.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

In the nine months ended March 31, 2025, selling, general and administrative expenses remained relatively flat, or increased $11.4, to $2,382.8 from $2,371.4 in the nine months ended March 31, 2024. Selling, general and administrative expenses as a percentage of net revenues increased to 51.3% in the nine months ended March 31, 2025 from 49.9% in the nine months ended March 31, 2024, or approximately 140 basis points. This increase was primarily due to:

(i) 180 basis points primarily due to the loss on the termination of the KKW Collaboration Agreement in the current period; and

(ii) 30 basis points due to an increase in advertising and consumer promotional costs as a percentage of net revenues.

These increases were partially offset by the following decreases:

(i) 50 basis points due to a decrease in stock-based compensation cost primarily related to a reduction in expense recognized in connection with awards granted to the CEO; and

(ii) 20 basis points due to a decrease in administrative costs as a result of decreased discretionary compensation for employees.

OPERATING INCOME

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.

### Operating Income (Loss) by Segment

*(in millions)*

| Operating income (loss) | Nine Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | ---: |
| Prestige | $542.5 | $531.0 | 2% |
| Consumer Beauty | (111.4) | 79.0 | \<(100%) |
| Corporate | (205.5) | (98.0) | \<(100%) |
| **Total** | **$225.6** | **$512.0** | **(56)%** |

#### Prestige

In the nine months ended March 31, 2025, operating income for Prestige was $542.5 compared to income of $531.0 in the nine months ended March 31, 2024. Operating margin increased to 17.7% of net revenues in the nine months ended March 31, 2025 as compared to 17.4% in the nine months ended March 31, 2024, driven primarily by lower cost of goods sold as a percentage of net revenues (approximately 160 basis points), lower fixed costs as a percentage of net revenues (approximately 50 basis points) primarily related to decreased discretionary compensation for employees, partially offset by asset impairment charges (approximately 140 basis points) and an increase in advertising and consumer promotional expense (approximately 30 basis points). Our Prestige operating income margin was positively impacted by a higher proportion of net revenues generated by the higher margin fragrance brands.

#### Consumer Beauty

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.

#### Corporate

Corporate primarily includes corporate expenses not directly related to our operating activities. These items are included in Corporate since we consider them to be Corporate responsibilities, and these items are not used by our management to measure the underlying performance of the segments.

In the nine months ended March 31, 2025, the operating loss for Corporate was $205.5 compared to a loss of $98.0 in the nine months ended March 31, 2024, as described under “Adjusted Operating Income for Coty Inc.” below. The increase to the operating loss for Corporate was primarily driven by the loss on the termination of the KKW Collaboration Agreement of $71.0, $61.0 related to an increase in restructuring and business realignment costs in the current period, partially offset by a decrease of $25.8 in stock compensation expense in the current period.

### Adjusted Operating Income by Segment

We believe that Adjusted Operating income by segment further enhances an investor’s understanding of our performance. See “Overview—Non-GAAP Financial Measures.” A reconciliation of reported Operating income to Adjusted Operating income is presented below, by segment:

*(in millions)*

| Operating income | Nine Months Ended March 31, 2025 Reported (GAAP) | Adjustments (a) | Adjusted (Non-GAAP) |
| --- | ---: | ---: | ---: |
| Prestige | 542.5 | $156.0 | $698.5 |
| Consumer Beauty | (111.4) | 198.1 | 86.7 |
| Corporate | (205.5) | 205.5 | — |
| **Total** | **$225.6** | **$559.6** | **$785.2** |

*(in millions)*

| Operating income | Nine Months Ended March 31, 2024 Reported (GAAP) | Adjustments (a) | Adjusted (Non-GAAP) |
| --- | ---: | ---: | ---: |
| Prestige | 531.0 | $115.6 | $646.6 |
| Consumer Beauty | 79.0 | 29.8 | 108.8 |
| Corporate | (98.0) | 98.0 | — |
| **Total** | **$512.0** | **$243.4** | **$755.4** |

54

(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.

### Net Income, Adjusted Operating Income and Adjusted EBITDA for Coty Inc.

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

*(in millions)*

|  | Nine Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | ---: |
| **Net (loss) income** | **$(280.9)** | **$205.0** | **\<(100%)** |
| Net (loss) income margin | (6.1)% | 4.3% |  |
| Provision for income taxes | 9.6 | 106.9 | (91)% |
| **(Loss) income before income taxes** | **$(271.3)** | **$311.9** | **\<(100%)** |
| Interest expense, net | 164.1 | 190.3 | (14)% |
| Other expense, net | 332.8 | 9.8 | \>100% |
| **Reported operating income** | **$225.6** | **$512.0** | **(56)%** |
| Reported operating income margin | 4.9% | 10.8% |  |
| Amortization expense | 141.3 | 145.4 | (3)% |
| Restructuring and other business realignment costs | 90.6 | 29.6 | \>100% |
| Stock-based compensation | 44.6 | 70.4 | (37)% |
| Gain on sale of real estate | — | (1.6) | 100% |
| Early license termination and market exit costs | 70.3 | (0.4) | \>100% |
| Asset impairment charges | 212.8 | — | N/A |
| Total adjustments to reported operating income | $559.6 | $243.4 | \>100% |
| **Adjusted operating income** | **$785.2** | **$755.4** | **4%** |
| Adjusted operating income margin | 16.9% | 15.9% |  |
| Adjusted depreciation | 169.8 | 171.2 | (1)% |
| **Adjusted EBITDA** | **$955.0** | **$926.6** | **3%** |
| Adjusted EBITDA margin | 20.6% | 19.5% |  |

In the nine months ended March 31, 2025, adjusted operating income increased $29.8, to $785.2 from $755.4 in the nine months ended March 31, 2024. Adjusted operating margin increased to 16.9% of net revenues in the nine months ended March 31, 2025 from 15.9% in the nine months ended March 31, 2024. In the nine months ended March 31, 2025, adjusted EBITDA increased $28.4 to $955.0 from $926.6 in the nine months ended March 31, 2024. Adjusted EBITDA margin increased to 20.6% of net revenues in the nine months ended March 31, 2025 from 19.5% in the nine months ended March 31, 2024.

### Segment Operating Income (Loss), Segment Adjusted Operating Income (Loss) and Segment Adjusted EBITDA

#### Operating Income, Adjusted Operating Income and Adjusted EBITDA - Prestige Segment

*(in millions)*

|  | Nine Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | ---: |
| **Reported operating income** | **542.5** | **531.0** | **2%** |
| Reported operating income margin | 17.7% | 17.4% |  |
| Amortization expense | 113.1 | 115.6 | (2)% |
| Asset impairment charges | 42.9 | — | N/A |
| Total adjustments to reported operating income | $156.0 | $115.6 | 35% |
| **Adjusted operating income** | **$698.5** | **$646.6** | **8%** |
| Adjusted operating income margin | 22.8% | 21.2% |  |
| Adjusted depreciation | 83.2 | 80.2 | 4% |
| **Adjusted EBITDA** | **$781.7** | **$726.8** | **8%** |
| Adjusted EBITDA margin | 25.5% | 23.8% |  |

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

*(in millions)*

|  | Nine Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | ---: |
| **Reported operating (loss) income** | **(111.4)** | **79.0** | **\<(100%)** |
| Reported operating (loss) income margin | (7.0)% | 4.6% |  |
| Amortization expense | 28.2 | 29.8 | (5)% |
| Asset impairment charges | 169.9 | — | N/A |
| Total adjustments to reported operating income | $198.1 | $29.8 | \>100% |
| **Adjusted operating income** | **$86.7** | **$108.8** | **(20)%** |
| Adjusted operating income margin | 5.5% | 6.4% |  |
| Adjusted depreciation | 86.6 | 91.0 | (5)% |
| **Adjusted EBITDA** | **$173.3** | **$199.8** | **(13)%** |
| Adjusted EBITDA margin | 11.0% | 11.8% |  |

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

*(in millions)*

|  | Nine Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | --- |
| **Reported operating loss** | **$(205.5)** | **$(98.0)** | **\<(100%)** |
| Reported operating income (loss) margin | N/A | N/A |  |
| Restructuring and other business realignment costs | 90.6 | 29.6 | \>100% |
| Stock-based compensation | 44.6 | 70.4 | (37)% |
| Gain on sale of real estate | — | (1.6) | 100% |
| Early license termination and market exit costs | 70.3 | (0.4) | \>100% |
| Total adjustments to reported operating income | $205.5 | $98.0 | \>100% |
| **Adjusted operating income** | **$—** | **$—** | **N/A** |
| Adjusted operating income margin | N/A | N/A |  |
| Adjusted depreciation | — | — | N/A |
| **Adjusted EBITDA** | **$—** | **$—** | **N/A** |
| Adjusted EBITDA margin | N/A | N/A |  |

#### Amortization Expense

In the nine months ended March 31, 2025, amortization expense decreased to $141.3 from $145.4 in the nine months ended March 31, 2024. In the nine months ended March 31, 2025, amortization expense of $113.1 and $28.2 was reported in the

Prestige and Consumer Beauty segments, respectively. In the nine months ended March 31, 2024, amortization expense of $115.6 and $29.8 was reported in the Prestige and Consumer Beauty segments, respectively.

#### Restructuring and Other Business Realignment Costs

During the third quarter of fiscal 2025, we formulated a new plan, which was announced on April 24, 2025, to strengthen our operating model and simplify our fixed cost structure (the “Fixed Cost Reduction Plan”). Cash costs associated with the program include restructuring and business structure realignment costs and are expected to be approximately $80.0, roughly evenly split between fiscal 2026 and fiscal 2027.

In the nine months ended March 31, 2025, we incurred restructuring and other business structure realignment costs of $90.6 as follows:

- We incurred restructuring costs of $78.7, of which $74.4 related to the Fixed Cost Reduction Plan, included in the Condensed Consolidated Statements of Operations; and
- We incurred business structure realignment costs of $11.9 which is reported in Selling, general and administrative expenses and cost of sales, primarily related to the Fixed Cost Reduction Plan.

In the nine months ended March 31, 2024, we incurred restructuring and other business structure realignment costs of $29.6 as follows:

- We incurred restructuring costs of $35.0 primarily related to the Restructuring Actions, included in the Condensed Consolidated Statements of Operations; and
- We incurred a credit in business structure realignment costs of $(5.4) which is reported in Selling, general and administrative expenses.

#### Stock-based compensation

In the nine months ended March 31, 2025, stock-based compensation was $44.6 as compared with $70.4 in the nine months ended March 31, 2024. The decrease in stock-based compensation is primarily related to a reduction in expense recognized in connection with awards granted to the CEO.

#### Gain on Sale of Real Estate

In the nine months ended March 31, 2025 and 2024, we recognized $0.0 and a gain of $(1.6) related to sale of real estate, respectively.

#### Early License Termination and Market Exit Costs

In the nine months ended March 31, 2025, we incurred a net loss of $71.0 related to the loss on the termination of the KKW Collaboration Agreement and recognized a gain of $(0.7) related to our decision to wind down our business in Russia.

In the nine months ended March 31, 2024, we recognized a gain of $(0.4) related to the early termination of a license and market exit activity.

#### Asset Impairment Charges

In the nine months ended March 31, 2025, we incurred $212.8 of asset impairment charges of which $84.0, $61.0, and $24.9 related to the *Max Factor, CoverGirl* and *Bourjois* trademarks, respectively, totaling $169.9 within the Consumer Beauty segment and $42.9 related to the *philosophy* trademark within the Prestige Segment.

In the nine months ended March 31, 2024, we did not incur any asset impairment charges.

#### Adjusted Depreciation Expense

In the nine months ended March 31, 2025, adjusted depreciation expense of $83.2 and $86.6 was reported in the Prestige and Consumer Beauty segments, respectively. In the nine months ended March 31, 2024, adjusted depreciation expense of $80.2 and $91.0 was reported in the Prestige and Consumer Beauty segments, respectively.

INTEREST EXPENSE, NET

In the nine months ended March 31, 2025, net interest expense was $164.1 as compared with $190.3 in the nine months ended March 31, 2024. This decrease is primarily due to lower debt balances in the current period as well as lower interest rates.

OTHER EXPENSE

In the nine months ended March 31, 2025, other expense was $332.8 as compared to other expense of $9.8 in the nine months ended March 31, 2024.

Other expense of $332.8 in the nine months ended March 31, 2025 was principally comprised of net losses on forward repurchase contracts of $246.6 and equity investment related impacts of $85.0.

Other expense of $9.8 in the nine months ended March 31, 2024 was principally comprised of net losses on forward repurchase contracts of $20.8 and deferred financing fees of $7.4, partially offset by fair value gains related to our equity investment in Wella of $20.0, and gains associated with earn-out provisions related to our sale of Wella of $9.9.

This increase in Other expense of $323.0 is primarily due to higher net losses on forward repurchase contracts of $225.8 and higher losses from equity investments of $105.0 as a result of an unfavorable fair market value adjustment in the current period compared to favorable adjustments in the prior year period.

INCOME TAXES

The effective income tax rate for the nine months ended March 31, 2025 and 2024 was (3.5)% and 34.3%, respectively. The change in the effective rate is primarily due to a capital loss realized on the sale of the Company’s investment in KKW Holdings during the period for which no tax benefit can be recognized, the loss on forward repurchase contracts having a higher proportional impact in the current period, as well as the impact of fair value losses related to the investment in Wella taxed at a rate below the statutory rate of 21%.

The effective tax rate of (3.5)% for the nine months ended March 31, 2025, results from reporting losses before income taxes and a provision for income taxes. The effective rate was lower than the statutory tax rate of 21% due to a capital loss realized on the sale of the Company’s investment in KKW Holdings during the period for which no tax benefit can be recognized, the loss on forward repurchase contracts having a higher proportional impact in the current period, as well as the impact of fair value losses related to the investment in Wella taxed at a rate below the statutory rate of 21%.

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.

The effective income tax rates vary from the U.S. federal statutory rate of 21% due to the effect of: (i) jurisdictions with different statutory rates, including impacts of rate changes, (ii) adjustments to our unrecognized tax benefits and accrued interest; (iii) non-deductible expenses, (iv) audit settlements and (v) valuation allowance changes. Our effective tax rate could fluctuate significantly and could be adversely affected to the extent earnings are lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates.

### Reconciliation of Reported Income Before Income Taxes to Adjusted Income Before Income Taxes and Effective Tax Rates:

*(in millions)*

|  | Nine Months Ended March 31, 2025 Income Before Income Taxes | Provision for Income Taxes | Effective Tax Rate | Nine Months Ended March 31, 2024 Income Before Income Taxes | Provision for Income Taxes | Effective Tax Rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Reported income before income taxes** | **$(271.3)** | **$9.6** | **(3.5)%** | **$311.9** | **$106.9** | **34.3%** |
| Other adjustments to reported operating income (a) | 559.6 |  |  | 243.4 |  |  |
| Change in fair value of investment in Wella Company (c) | 85.0 |  |  | (20.0) |  |  |
| Other adjustments (d) | 0.4 |  |  | 4.3 |  |  |
| Total Adjustments (b) | 645.0 | 97.2 |  | 227.7 | 52.0 |  |
| **Adjusted income before income taxes** | **$373.7** | **$106.8** | **28.6%** | **$539.6** | **$158.9** | **29.4%** |

(a) See a description of adjustments under “Net Income, Adjusted Operating Income and Adjusted EBITDA for Coty Inc.”

(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.

(c) The amount represents the unrealized (gain) loss recognized for the change in fair value of the investment in the Wella Company.

(d) For the nine months ended March 31, 2025, this primarily represents recovery of previously written-off non-income tax credits, the amortization of basis differences in certain equity method investments, and net loss on the sale of an equity investment. For the nine months ended March 31, 2024, this primarily represents divestiture-related costs related to our equity investments and loss from our equity investment in KKW.

The adjusted effective tax rate was 28.6% for the nine months ended March 31, 2025 compared to 29.4% for the nine months ended March 31, 2024. The difference is primarily due to an expense of $24.3 recognized on the revaluation of the Company's deferred tax liabilities due to a tax rate increase enacted in Switzerland in the prior period.

NET (LOSS) INCOME ATTRIBUTABLE TO COTY INC.

Net loss attributable to Coty Inc. was $299.1 in the nine months ended March 31, 2025, as compared to net income of $186.3 in the nine months ended March 31, 2024. This increase in net loss was primarily driven by higher net losses on forward repurchase contracts of $225.8, asset impairment charges of $212.8, higher losses from equity investments of $105.0 as a result of an unfavorable fair market value adjustment in the current period compared to favorable adjustments in the prior year period, and higher restructuring costs of $43.7, partially offset by a lower provision for income taxes of $97.3 in the current period, and lower interest expense of $26.2 in the current period.

We believe that adjusted net income attributable to Coty Inc. provides an enhanced understanding of our performance. See “Overview—Non-GAAP Financial Measures.”

*(in millions)*

|  | Nine Months Ended March 31, 2025 | 2024 | Change % |
| --- | ---: | ---: | ---: |
| **Net (loss) income attributable to Coty Inc.** | **(299.1)** | **186.3** | **\<(100%)** |
| Convertible Series B Preferred Stock dividends (a) | (9.9) | (9.9) | —% |
| **Reported net (loss) income attributable to common stockholders** | **(309.0)** | **176.4** | **\<(100%)** |
| % of net revenues | (6.7)% | 3.7% |  |
| Adjustments to reported operating income (b) | 559.6 | 243.4 | \>100% |
| Change in fair value of investment in Wella Company (c) | 85.0 | (20.0) | \>100% |
| Adjustment to other expense (d) | 0.4 | 4.3 | (91)% |
| Adjustments to noncontrolling interests (e) | (5.1) | (5.1) | —% |
| Change in tax provision due to adjustments to reported net income attributable to Coty Inc. | (97.2) | (52.0) | (87)% |
| **Adjusted net income attributable to Coty Inc.** | **233.7** | **347.0** | **(33)%** |
| % of net revenues | 5.0% | 7.3% |  |
| **Per Share Data** |  |  |  |
| Adjusted weighted-average common shares |  |  |  |
| Basic | 870.4 | 876.7 |  |
| Diluted (a) | 875.5 | 886.1 |  |
| Adjusted net income attributable to Coty Inc. per common share |  |  |  |
| Basic | $0.27 | $0.40 |  |
| Diluted (a) | $0.27 | $0.39 |  |

(a) Adjusted Diluted EPS is adjusted by the effect of dilutive securities. For the nine months ended March 31, 2025 and 2024, no dilutive shares of the Forward Repurchase Contracts were included in the computation of adjusted diluted EPS as their inclusion would be anti-dilutive. Accordingly, we did not reverse the impact of the fair market value losses for contracts with the option to settle in shares or cash of $188.9 and $6.9, respectively. For the nine months ended March 31, 2025 and 2024, Convertible Series B Preferred Stock (23.7 million weighted average dilutive shares) were anti-dilutive. Accordingly, we excluded these shares from the diluted shares and did not adjust the earnings for the related dividend of $9.9.

(b) See a description of adjustments under “Net Income, Adjusted Operating Income and Adjusted EBITDA for Coty Inc.”

(c) The amount represents the unrealized (gain) loss recognized for the change in fair value of the investment in the Wella Company.

(d) For the nine months ended March 31, 2025, this primarily represents recovery of previously written-off non-income tax credits, the amortization of basis differences in certain equity method investments, and net loss on the sale of an equity investment. For the nine months ended March 31, 2024, this primarily represents divestiture-related costs related to our equity investments and loss from our equity investment in KKW.

(e) The amounts represent the after-tax impact of the non-GAAP adjustments included in Net income attributable to noncontrolling interests based on the relevant noncontrolling interest percentage in the Condensed Consolidated Statements of Operations.

### FINANCIAL CONDITION

LIQUIDITY AND CAPITAL RESOURCES

### Overview

Our primary sources of funds include cash expected to be generated from operations, borrowings from issuance of debt and lines of credit provided by banks and lenders in the U.S. and abroad.

Our cash flows are subject to seasonal variation throughout the year, including demands on cash made during our first fiscal quarter in anticipation of higher global sales during the second fiscal quarter and strong cash generation in the second fiscal quarter as a result of increased demand by retailers associated with the holiday season.

Our principal uses of cash are to fund planned operating expenditures, capital expenditures, interest payments, dividends, share repurchases, any principal payments on debt, and from time to time, acquisitions, and business structure realignment expenditures. Working capital movements are influenced by the sourcing of materials related to the manufacturing of products. Cash and working capital management initiatives, including the phasing of vendor and tax payments and factoring of trade receivables from time-to-time, may also impact the timing and amount of our operating cash flows.

We remain focused on deleveraging our balance sheet using cash flows generated from our operations and other targeted initiatives. We continue to take steps to permanently reduce our debt to reduce interest costs and improve our long-term profitability and cash flows. Our 25.84% investment in Wella continues to give us the opportunity for further permanent debt reductions when our equity position is divested.

We have substantially completed the exit of our commercial activities in Russia. However, we anticipate that the process related to the liquidation of the Russian legal entity will take an extended period of time. We anticipate that we will incur an immaterial amount of additional costs through the completion of the wind down, and future net cash costs of $1.0 to $1.5, which will be funded by our Russian subsidiary. The amount of future costs, including cash costs, will be subject to various factors, such as additional government regulation and the resolution of legal contingencies.

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.

During the third quarter of fiscal 2025, we formulated a new plan, which was announced on April 24, 2025, to strengthen our operating model and simplify our fixed cost structure (the “Fixed Cost Reduction Plan”). Cash costs associated with the program include restructuring and business structure realignment costs and are expected to be approximately $80.0, roughly evenly split between fiscal 2026 and fiscal 2027.

### Debt Financing

We are in the process of deleveraging our company and improving the maturity mix of our debt, including through refinancing or repayment of a portion of our debt. We expect to continue to take actions to improve the maturity mix of our debt, including through redemptions and/or tender offers for near-dated maturities, from time to time as market conditions permit.

We have taken action to reduce variability in our interest payments including paying down variable interest rate debt outstanding under our 2018 Coty Term A and 2018 Coty Term B Facility, and issuing fixed rate bonds. While our revolving credit facility, which we draw on from time to time, is subject to variable interest rates, all of our non-revolving credit facility long-term debt outstanding as of March 31, 2025 is fixed rate debt.

### Share Repurchases

In connection with our Share Repurchase Program, we entered into forward repurchase contracts in June 2022, December 2022, and November 2023 with three large financial institutions to hedge for $200.0, and a potential $196.0 and $294.0 of share repurchases in 2024, 2025 and 2026, respectively. We physically settled the June 2022 forward repurchase contracts by delivering approximately $200.0 cash in exchange for 27.0 million shares of our Class A Common Stock during fiscal 2024.

Our remaining forward repurchase contracts permit a net cash settlement alternative in addition to the physical settlement. We may elect net cash settlement of all, or some of the remaining forward repurchase contracts based on factors such as timing, the market value of the underlying shares at the settlement date and other internal cash management considerations. We will continue to incur costs associated with the remaining forward repurchase contracts before settlement. Cash costs incurred in the current fiscal year to date for all forward repurchase contracts amounted to $29.4.

Our forward repurchase contracts include a provision for a potential true-up in cash upon specified changes in the price of Coty’s Class A Common Stock relative to the counterparties’ initial purchase price (the “Hedge Valuation Adjustment”). In October 2024, the price of Coty’s Class A Common Stock declined, resulting in a potential Hedge Valuation Adjustment event under the November 2023 forward repurchase contracts, with a corresponding potential cash true-up obligation. During the second quarter of fiscal 2025, we paid $61.8 to the counterparties, which was refunded to us during the same period after entering into agreements with the applicable counterparties in November 2024 for a temporary contractual amendment to the November 2023 forward repurchase contracts' Hedge Valuation Adjustment mechanism.

The amendments were effective from October 2024 to February 2025 and did not apply to the forward repurchase contracts executed in December 2022. The share price further declined during the amendment period, triggering cash settlements under our December 2022 and November 2023 forward repurchase contracts of $191.1 million, in February 2025.

Future reductions in the price of Coty’s Class A Common Stock may trigger additional payments under our remaining forward repurchase contracts. The cash settlement liability under all our forward repurchase contracts based on Coty's share price as of May 6, 2025 totaled approximately $53.0, a $14.0 increase from March 31, 2025. See Footnote 13—Equity for additional information on the Company's forward repurchase contracts.

### Factoring of Receivables

From time to time, we supplement the timing of our cash flows through the factoring of trade receivables. In this regard, we have entered into factoring arrangements with financial institutions.

The net amount factored under the factoring facilities was $216.6 and $195.3 as of March 31, 2025 and June 30, 2024, respectively. The aggregate amount of trade receivable invoices factored on a worldwide basis amounted to $1,148.9 and $1,196.9 during the nine months ended March 31, 2025 and 2024, respectively.

### Cash Flows

| Condensed Consolidated Statements of Cash Flows Data: (in millions) | Nine Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $409.4 | $438.1 |
| Net cash used in investing activities | (80.1) | (161.5) |
| Net cash used in financing activities | (384.1) | (264.1) |

#### Net cash provided by operating activities

Net cash provided by operating activities was $409.4 and $438.1 for the nine months ended March 31, 2025 and 2024, respectively. The decrease in cash provided by operating activities of $28.7 was mainly driven by the impact of higher cash outflows from working capital and higher year-over-year cash-related Net Income. Higher net cash outflows from working capital was primarily driven by lower net cash flows from changes in accrued expenses and other current liabilities, mainly due to lower discretionary compensation accruals for employees, higher cash paid for interest resulting from the phasing of interest payments on third-party debt, and the net impact from timing of invoice processing which caused an increase in cash flows from accounts payable. Working capital cash flows also reflect the impact of the prior-year Wella reimbursement for working capital which did not recur in the current year. The decrease in cash provided by operating activities was partially offset by lower cash outflows related to the timing of payments for income taxes.

#### Net cash used in investing activities

Net cash used in investing activities was $80.1 and $161.5 for the nine months ended March 31, 2025 and 2024, respectively. The decrease in cash used in investing activities of $81.4 primarily reflects the $74.0 cash proceeds from the termination of the KKW Collaboration Agreement and sale of the 20% KKW Holdings equity investment, and lower capital expenditures year-over-year. This was partially offset by lower inflows in the current year, driven by the prior year impact of cash proceeds from an early license termination that did not recur in the current year.

#### Net cash used in financing activities

Net cash used in financing activities during the nine months ended March 31, 2025 and 2024 was $384.1 and $264.1, respectively. The increase in cash used in financing activities of $120.0 was primarily driven by the impact of the prior year cash proceeds from issuance of Class A Common Stock in connection with the global offering which did not recur, and higher net repayments relating to other long-term debt. This was partially offset by higher net proceeds from the Company's revolving credit facility and lower cash payments for deferred financing fees in the current year. Net cash used in financing activities as it relates to the forward repurchase contracts was relatively flat year-over-year, reflecting the cash payment for the settlement of the June 2022 forward repurchase contract in the prior year, and cash payments and refund for the hedge valuation adjustments in the current year.

### Dividends

On April 29, 2020, the Board of Directors suspended the payment of dividends on Common Stock. As previously disclosed, we expect to suspend the payment of dividends until we approach a Net debt to Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) target of 2x. We expect to consider any future resumption of dividends in line with that target while continuing to pursue our deleveraging agenda and implementing our strategic initiatives. Any determination to pay dividends in the future will be at the discretion of our Board of Directors.

Dividends on the Convertible Series B Preferred Stock are payable in cash, or by increasing the amount of accrued dividends on Convertible Series B Preferred Stock, or any combination thereof, at the sole discretion of the Company. We expect to pay such dividends in cash on a quarterly basis, subject to the declaration thereof by our Board of Directors. The terms of the Convertible Series B Preferred Stock restrict our ability to declare cash dividends on our common stock until all accrued dividends on the Convertible Series B Preferred Stock have been declared and paid in cash.

For additional information on our dividends, see Note 13—Equity and Convertible Preferred Stock in the notes to our Condensed Consolidated Financial Statements.

### Treasury Stock - Share Repurchase Program

For information on our Share Repurchase Program, see Note 13—Equity and Convertible Preferred Stock in the notes to our Condensed Consolidated Financial Statements.

### Commitments and Contingencies

See Note 16—Redeemable Noncontrolling Interests in the notes to our Condensed Consolidated Financial Statements for information on our subsidiary in the Middle East.

### Legal Contingencies

For information on our litigation matters and Brazilian tax assessments, see Note 17—Commitments and Contingencies in the notes to our Condensed Consolidated Financial Statements. In relation to the appeal of our Brazilian tax assessments, we have entered into surety bonds of R$899.4 million (approximately $156.2) as of March 31, 2025.

### Off-Balance Sheet Arrangements

We had undrawn letters of credit of $4.1 and $4.1 and bank guarantees of $16.9 and $18.4 as of March 31, 2025 and June 30, 2024, respectively.

### Contractual Obligations

Our principal contractual obligations and commitments as of June 30, 2024 are summarized in Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Contractual Obligations and Commitments,” of our Fiscal 2024 Form 10-K. Refer to Item 2 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Share Repurchases” above for discussion of the obligations related to our announced share repurchase during fiscal 2024. For the nine months ended March 31, 2025, there have been no other material changes in our contractual obligations outside the ordinary course of business.

### Critical Accounting Policies

We believe that the critical accounting policies listed below involve our more significant judgments, assumptions and estimates and, therefore, could have the greatest potential impact on our Condensed Consolidated Financial Statements:

- Revenue Recognition;
- Equity Investments;
- Goodwill, Other Intangible Assets and Long-Lived Assets;
- Inventory; and
- Income Taxes.

As of March 31, 2025, there have been no material changes to the items disclosed as critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II—Item 7 of our Fiscal 2024 Form 10-K.

### Goodwill

Based on the annual impairment test performed at May 1, 2024, we determined that the fair values of our reporting units exceeded their respective carrying values at that date by approximately 143.6% for Prestige and 69.9% for Consumer Beauty. The impact of recent weakening demand in the color cosmetics market, particularly in the United States and Europe, combined with broader macroeconomic disruptions, could lower the overall cushion for the reporting units. However, at this time, we do not believe a triggering event for an interim impairment test was warranted based on our qualitative assessments. As such, there were no impairments of goodwill at the Company's reporting units as of March 31, 2025.

### Other Intangible Assets

The carrying value of our indefinite-lived other intangible assets was $736.5 as of March 31, 2025, and is comprised of trademarks for the following brands: CoverGirl of $266.4, Sally Hansen of $159.2, Philosophy of $80.5, Max Factor of $64.4, Bourjois of $11.6, and other brands totaling $154.4.

#### Approach

The trademarks’ fair values are based upon the income approach, primarily utilizing the relief from royalty methodology. This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to obtain the rights to use the comparable asset. An impairment loss is recognized when the estimated fair value of the intangible asset is less than the carrying value. Fair value calculation requires significant judgments in determining both the assets’ estimated cash flows as well as the appropriate discount and royalty rates applied to those cash flows to determine fair value. Variations in the economic conditions or a change in general consumer demands, operating results estimates or the application of alternative assumptions could produce significantly different results.

#### Results

As noted above, the Company was adversely impacted by weakening demand in the color cosmetics market, particularly in the United States and Europe, combined with broader macroeconomic disruptions. As a result, the Company determined that an interim impairment measurement for certain other intangible assets was warranted as of March 31, 2025.

As a result of the lower revenue projections, the interim impairment test of indefinite-lived intangible assets resulted in the carrying values of certain trademarks exceeding their estimated fair values. Accordingly, we recorded an impairment charge of $212.8 for the three and nine months ended March 31, 2025 to reflect such intangible assets at their estimated fair values. These impairments related to the Max Factor ($84.0), CoverGirl ($61.0) and Bourjois ($24.9) trademarks within the Consumer Beauty segment and the Philosophy ($42.9) trademark within the Prestige segment.

The fair value of the Max Factor trademark fell below its carrying value using a flat annual growth rate and a discount rate of 13.4%. The fair value of the CoverGirl trademark fell below its carrying value using projections that assumed an average annual growth rate of 2.0% and a discount rate of 12.2%. The fair value of the Bourjois trademark fell below its carrying value using a flat annual growth rate and a discount rate of 20.0%. The fair value of the Philosophy trademark fell below its carrying value using a flat annual growth rate and a discount rate of 11.5%.

As the trademarks for which impairment charges were recorded in the three and nine months ended March 31, 2025 no longer have any excess of their fair values over their carrying values, any material decline in assumed average annual revenue growth rates or increase in the discount rate could result in additional impairment charges. For instance, with regards to the Max Factor trademark, if the annual revenue declined by 5% it may cause an additional impairment of $3.1. If the discount rate increased by 50 basis points, it may cause an additional impairment of $2.4. With regards to the CoverGirl trademark, if the annual revenue declined by 5% it may cause an additional impairment of $13.0. If the discount rate increased by 50 basis points, it may cause an additional impairment of $12.1. With regards to the Bourjois trademark, if the annual revenue declined by 5% it may cause an additional impairment of $0.6. If the discount rate increased by 50 basis points, it may cause an additional impairment of $0.3. With regards to the Philosophy trademark, if the annual revenue declined by 5% it may cause an additional impairment of $3.9. If the discount rate increased by 50 basis points, it may cause an additional impairment of $3.8.

Some of the inherent estimates and assumptions used in determining fair value of the indefinite-lived other intangible assets are outside the control of management, including interest rates, cost of capital, tax rates, credit ratings and industry growth. Given the weakening demand in the color cosmetics market, particularly in the United States and Europe, combined with broader macroeconomic disruptions and the potential financial impact on the Company’s business, there can be no assurance that the Company's estimates and assumptions regarding the macroeconomic factors made for purposes of the indefinite-lived intangible asset interim impairment testing performed during the third quarter of our 2025 fiscal year will prove to be accurate predictions of the future. While the Company believes it has made reasonable estimates and assumptions to calculate the fair values of the other indefinite-lived intangible assets, it is possible changes could occur. Regarding the indefinite-lived intangible assets, the most significant assumptions used are the revenue growth rate and the discount rate, a decrease in the revenue growth rate or an increase in the discount rate could result in a future impairment. The Company will continue to monitor its indefinite-lived trademarks for any triggering events or other signs of impairment. The Company may be required to perform additional impairment testing based on changes in the economic environment, disruptions to the Company’s business, significant declines in operating results of the Company’s trademarks. Although management cannot predict when improvements in macroeconomic conditions will occur, if consumer confidence and consumer spending decline significantly in the future, it is reasonably likely the Company will be required to record impairment charges in the future.

## Market risk

As filed, 303 characters.

See Note 12—Derivative Instruments for updates to our foreign currency risk management and interest rate risk management. There have been no material changes in market risk from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk of our Fiscal 2024 Form 10-K.

## Controls and procedures

As filed, 3,527 characters.

### Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer (the “CEO”) and our Chief Financial Officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2025. Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our CEO and CFO concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(f) of the Exchange Act during the third fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Inherent Limitations on Effectiveness of Controls

Our management, including our CEO and CFO, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving our objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

## Risk factors

As filed, 196 characters.

We have disclosed information about the risk factors that could adversely affect our business in Part I, Item 1A under the heading “Risk Factors” in our Annual Report on Form 10-K for fiscal 2024.

Filed May 7, 2025.
Source: SEC EDGAR, the filing index for accession 0001024305-25-000018. Last ingested by Listed: Nov 5, 2026, 18:58 ET. No prices; not investment advice.