NEW YORK, May 04, 2026 (GLOBE NEWSWIRE) -- "We also expect to return to adjusted EBITDA growth in the second half, targeting around $1 billion in adjusted EBITDA for the year." That was the promise. Three months later, Coty Inc. (NYSE: COTY) withdrew that guidance entirely and estimated Q3 adjusted EBITDA of just $100 million to $110 million. Find out if you can recover losses from Coty's broken projections or contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.
Investors who purchased COTY stock between November 5, 2025 and February 4, 2026 watched shares fall 22% from $3.43 to $2.66 per share after the Company's corrective disclosures. The lead plaintiff deadline is May 22, 2026.
The Promise
On November 5, 2025, management told investors that business trends were "already improving, in line to slightly ahead of our expectations, particularly in Prestige." The Company projected like-for-like sales would return to growth in the second half of fiscal 2026 and that sell-in and sell-out would reach alignment. Adjusted EBITDA was targeted at approximately $1 billion for the full year, as claimed in the earnings call.
The Reality
By February 2026, every major projection had reversed:
- Prestige Fragrance Sell-Out: Promised to be "in line with the market" and accelerating. Actual Q2 result: flattish, underperforming the market by several points
- Consumer Beauty Trends: Described as undergoing strategic transformation with "positive green shoots." Actual result: a large gap in sell-out relative to U.S. mass cosmetics, with weakening sales trends driving a mid-single-digit Q3 revenue decline
- FY26 Adjusted EBITDA: Targeted at ~$1 billion. Actual: guidance withdrawn; Q3 EBITDA estimated at only $100M to $110M
- Operational Discipline: Touted a "performance and operational excellence office" and cost savings. Actual: the incoming interim CEO admitted discipline had "slipped across the organization over the past 2 years"
- Gross Margin: Implied stability from cost initiatives. Actual: 200 basis point decline, with another 200 to 300 bps decline projected for Q3
What the Lawsuit Contends About the Gap
The securities action asserts that these were not ordinary business misses. The complaint charges that management disseminated materially false and misleading statements about Coty's growth potential while concealing that the Consumer Beauty segment was already underperforming, that margins were being compressed by increased marketing spend, and that Prestige fragrance momentum was slowing. The gap between promise and result, the filing states, caused shareholders to purchase COTY stock at artificially inflated prices.
"Companies that make specific promises to investors about future performance have an obligation to disclose known risks to those projections. The contrast between what Coty projected in November and what it revealed in February raises important questions for shareholders." -- Joseph E. Levi, Esq.
Check whether you qualify to recover your Coty investment losses or call (212) 363-7500.
LEAD PLAINTIFF DEADLINE: May 22, 2026
Levi & Korsinsky, LLP is a nationally recognized shareholder rights firm. Over the past 20 years, the firm has secured hundreds of millions of dollars for aggrieved shareholders. Ranked in ISS Top 50 for seven consecutive years.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
Tel: (212) 363-7500
Fax: (212) 363-7171
