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COTY Investor Alert: Coty Inc. Securities Fraud Lawsuit - Investors With Losses May Seek to Lead the Class Action After Executives Allegedly Concealed Slowing Growth: Levi & Korsinsky
Important Notice Regarding Alleged Growth and Profitability Misrepresentations
NEW YORK, April 27, 2026 (GLOBE NEWSWIRE) -- Levi & Korsinsky, LLP notifies investors in Coty Inc. (NYSE: COTY) that a class action lawsuit has been filed on behalf of shareholders who purchased securities between November 5, 2025, and February 4, 2026. Find out if you qualify to recover losses. You may also contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.
Coty's adjusted EBITDA fell 17% to $626.3 million for the six months ended December 31, 2025, and the Company withdrew its prior fiscal year 2026 EBITDA and free cash flow guidance entirely. Shares fell approximately 22%, from $3.43 to $2.66, costing shareholders $0.77 per share.
How the Alleged Beauty Market Slowdown Affected Reported Financials
The global beauty industry had been a source of investor confidence for years, with Prestige fragrances growing at mid-single-digit rates as recently as late 2025. The lawsuit contends that Coty's management painted an optimistic picture of the Company's position within this market, projecting a return to like-for-like sales growth in the second half of fiscal year 2026 and targeting approximately $1 billion in adjusted EBITDA for the full year. According to the lawsuit, these projections obscured a deteriorating reality: sell-out in Prestige fragrances had gone flattish, Consumer Beauty was significantly underperforming the U.S. mass cosmetics category, and margins were being compressed by rising costs and increased marketing spend.
Key Allegations for Shareholders
- The Company allegedly overstated its ability to return to growth in the second half of fiscal year 2026 while Consumer Beauty sell-out lagged the broader U.S. mass cosmetics market by a wide margin
- Prestige fragrance sell-out allegedly went from "in line with the market" in Q1 to flattish in Q2, underperforming the category by several percentage points
- Adjusted operating income declined 19% and adjusted operating margin contracted 330 basis points, the complaint alleges, reflecting pressures management did not adequately disclose
- The lawsuit asserts that gross margins fell 200 basis points year-over-year due in part to undisclosed cost increases tied to a near-doubling of CoverGirl innovation SKUs
- The Company withdrew full-year EBITDA guidance and slashed its Q3 adjusted EBITDA estimate to just $100 million to $110 million, down sharply from prior expectations
The Consumer Beauty Underperformance Factor
The action claims that while management publicly touted a transformation of the Consumer Beauty segment, including new leadership appointments and AI-driven efficiencies, operational discipline had in fact "slipped across the organization over the past 2 years." This admission, made only after the corrective disclosure, stands in contrast to months of positive forward-looking statements about innovation pipelines and cost optimization.
"This case presents important questions about growth and profitability disclosure obligations in the beauty and consumer products sector. When a company projects $1 billion in adjusted EBITDA and a return to growth while internal trends are allegedly moving in the opposite direction, investors deserve to know." -- Joseph E. Levi, Esq.
Submit your information to join this case or contact Joseph E. Levi, Esq. at (212) 363-7500.
ABOUT LEVI & KORSINSKY, LLP -- Over the past 20 years, Levi & Korsinsky has secured hundreds of millions of dollars for aggrieved shareholders. The firm has extensive expertise in complex securities litigation and a team of over 70 employees. For seven consecutive years, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report. Applications to serve as lead plaintiff must be filed by May 22, 2026.
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
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