Coty's 10-K Reveals $362.8M Impairments, Debt Covenant Reinstatement After Downgrade
COTY sits 51% above its 52-week low of $1.82.
Summary
Coty's 10-K reveals $362.8M in impairments, a $590.2M net loss, and debt covenant reinstatement after a credit downgrade, alongside new shareholder litigation.
Key Events · Earnings and Guidance · COTY
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Massive Impairments Hit Consumer Beauty
Coty recorded $362.8M in asset impairment charges in fiscal 2026, including $237.1M of goodwill impairment and $125.7M of trademark impairments (CoverGirl, Sally Hansen, Max Factor, Bourjois) within the Consumer Beauty segment.
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Full-Year Net Loss of $590.2M
The company reported a net loss of $590.2M for fiscal 2026, compared to a loss of $350.2M in fiscal 2025, driven by impairments, lower gross profit, and higher amortization.
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Debt Covenant Reinstatement After Downgrade
A July 9, 2026 credit rating downgrade ended the covenant suspension on Coty's Senior Secured Notes, reinstating collateral and guarantee requirements and potentially increasing future borrowing costs.
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Gucci License Termination Provides Cash
Coty received $250.0M in cash on July 7, 2026 from the early termination of the Gucci Beauty license, with an additional $150.0M due by September 30, 2027, to be used for debt reduction and portfolio investment.
Analysis · COTY · Industrial Applications And Services
Coty's annual report confirms a brutal fiscal 2026: a $590.2M net loss driven by $362.8M in asset impairments, mostly in the struggling Consumer Beauty segment. The company also disclosed that a July 9, 2026 credit rating downgrade triggered the reinstatement of covenants and collateral requirements on its senior secured notes, increasing future borrowing costs. While the $250M Gucci license termination payment provides some liquidity, the combination of impairments, covenant reinstatement, and ongoing litigation paints a picture of a company under significant financial and operational stress.
At the time of this filing, COTY was trading at $2.75 on NYSE in the Industrial Applications And Services sector, with a market capitalization of approximately $2.4B. The 52-week trading range was $1.82 to $4.94. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.