Coty (COTY) Stock Revenue Holds Up While Margin Pressure Deepens

Coty stock barely flinched after earnings, slipping just 0.4% to US$2.74, which suggests investors were already braced for a tough set of numbers. The real story is the squeeze on profitability. Q4 adjusted EBITDA fell sharply and the company reported a Q4 net loss of US$144.3 million despite revenue of US$1.27 billion. For a beauty group that trades on brand power and pricing, that margin pressure, rather than the modest sales move, is what matters most and sets the stage for the Coty.Curated transition story that follows. Is Coty a genuine value setup at 0.4x P/S, or is the widening loss profile exactly what the market is pricing in already? Compare the current share price against our valuation analysis for Coty Q4 2026 Earnings Summary. Revenue, Q4 2026 vs. Q4 2025: US$1,269.2 million compared with US$1,252.4 million (up 1.3%). Net Income/Loss, Q4 2026 vs. Q4 2025: loss of US$144.3 million compared with loss of US$72.1 million (loss widened 100.1%). Basic EPS, Q4 2026 vs. Q4 2025: loss of US$0.16 per share compared with loss of US$0.08 per share (loss per share widened 98.4%). Adjusted Gross Margin, FY26 vs. FY25: 63.0% compared with 64.9% (compressed by 190 basis points). Coty bullish story hinges on execution milestones. Bulls argue Coty can trade up on premium brands, cleaner execution, and better cash discipline even as Gucci rolls off. The latest numbers give partial support but not a full win. Prestige remains the anchor, with FY26 EBITDA margins around 20.5% and Q4 like-for-like sales almost flat. This helps the case that core franchises and high-profile launches like Kylie, Burberry, and Marc Jacobs can carry more weight over time. On the operational reset, Coty did what backers wanted: free cash flow reached US$348 million and net debt dropped to US$2.9 billion despite a sizeable EBITDA decline. However, the wider Q4 loss and 190 basis point gross margin compression show the business has not yet converted Coty.Curated and portfolio moves into a sturdier profit base. The bearish view on Coty is that high leverage and weak earnings visibility would keep margins fragile and limit reinvestment in brands. The latest numbers largely back that concern. Adjusted EBITDA fell more than 20% for the year and Q4 adjusted EBITDA dropped 26%, while adjusted gross margin compressed 190 basis points for FY26. This points to profitability pressure even before the full Gucci exit hits. Bears also worry that Consumer Beauty drags on the group and slows EBITDA recovery. Q4 Consumer Beauty EBITDA fell 67% year-on-year, despite sequential improvements. This is a clear missed milestone for building a sturdier second leg to Prestige. On leverage, net debt of US$2.9 billion and roughly 3.4x leverage represent progress but still fit the “elevated” label. Strong free cash flow helps but does not fully neutralize refinancing and investment constraints. With Coty still unprofitable, leverage elevated, and EBITDA under pressure, the question remains: do the cash flows genuinely support this balance sheet, or is dilution a real risk?