Hi, good morning, everyone, and good afternoon. I wanted to ask a bit about fiscal 2027.

Obviously, you characterize it as a transition year, and the framework you provide in the prepared remarks was helpful, but I'd love to hear a bit more of your KPI internally that you're looking to achieve throughout this transition year, and maybe talk a little bit more about the potential sources of upside, both from a top-line and profit standpoint, and any risks that you see as you think about this transition year. Thank you.

Okay. Filippo, you probably know that in the last couple of quarters, our sell-out has been trailing below the category, okay?

Obviously, that has led to lower sell-in and has led to all of the problems that we had. Our objective is to drive sell-out and to drive market share.

This is new thinking for the organization. The organization was traditionally sell-in focused, and it takes some time to create this adaptation.

We believe, as we outlined in the first quarter, we'll probably see a similar trend that we have seen in the last two quarters, but then we want to sequentially improve that. We have some strong incremental innovation coming up.

We have a more disciplined approach to spending. We're focusing on fewer bets, and we believe that this will over time decrease the sell-out gap versus the market.

Now, the question is how long this will take. I cannot answer you that today.

If this catches on faster, that will be the upside. If this takes longer, then we get to manage, and so far we have tried to give a 50/50 balanced picture on that.

It all depends on how fast can we drive sell-out, how fast can we drive market share. That's an important KPI for us.

We've even changed all our bonus systems for fiscal 2027, where market share, sell-out is now a very important KPI, and it has not been the case before. We believe the whole organization will be focused on this, and we hopefully see some upside here.

This is about sales. When we talk about EBITDA, obviously, we reducing the design risk we've seen in the last two quarters, and if there upside, yeah, that depends on how the Middle East is going to shape up, how oil prices are going to shape up.

We've built in $20 million to $30 million of cost for an oil price between $90 and $100. If it's getting better, might be getting a little bit better, and also we are still waiting for a potential tariff refund, which is about $30 million, that comes or comes not, depending when it comes, but there's some upside.

Of course, we keep working on future productivity and cost-savings effort on which we have delivered quite a good result in the last couple of years. That's kind of my balanced view on this.

Great. Thank you very much.

Good morning, everyone, and Laurent, thank you very much for all the help. You're going to be missed.

I have two questions on the on the presentation. One, if you can talk about what's happening in EMEA excluding the Middle East.

I believe that most of it is consumer brands in Europe, but if you can talk about why there is no improvement there, that would be helpful. Particularly on the consumer side, if you can give us if you can walk us through what is the portfolio there beyond the core brands that you always talk about, more kind of like the smaller brands, what's happening there?

Moving into the US is the second question. You made some comments about SKU reduction, and also there is some comments about capital spending related to marketing equipment.

If you can talk about whether that pertains to the US, what does it mean for COVERGIRL, and if you can give us an update in terms of shelf reset heading into the fall? Thank you.

Okay. Let me just unpack this.

Javier, for your first question, more European brands versus US brands. We have started our Color the Future performance improvement program in the consumer business basically in January, and that's a version of Coty Curated for consumer, and we have started this program in the US.

We have started all the interventions we have been making: simpler lineup, more powerful innovations, but fewer SKUs that we ship in, and all these kind of things on simply to us, mostly on brands like COVERGIRL and Sally Hansen. We see great traction.

Both brands have reduced the gap versus the market substantially over the year, and Sally Hansen is now even growing ahead of the market, even in value. We have been positively surprised by how quickly the interventions take on.

We also believe these interventions will help our EBITDA over time because part of our EBITDA decline on Consumer Beauty is the returns, obsolescence, because when the innovation is not selling, you get it back in the US trade. If we sell in less, more powerful things, and we have fewer SKUs on the shelf that are turning much more quickly, we're going to have less excess and obsolescence as we move along.

This is a very big part of our EBITDA building plan in Consumer Beauty. Having said that, we've started this program in the US, and now we're rolling it out to the rest of Europe.

The last country rollout was the UK, where we say some good traction now on Rimmel, especially in the last month, where Rimmel is catching up with the category finally. As a final step, in the next few weeks or months, we're going to roll this out to our mostly European brands.

These are brands like Max Factor and Bourjois that are mostly prevalent in Central Europe and in parts of Western Europe, and we have not implemented these interventions there yet, but they're about to come. I'm expecting that we're going to see some improvements there as well.

Coming back to the SKUs and the capex, you know that capex in makeup, in cosmetics is very expensive. We've done a lot of improvements with procurement and in the work with our vendors to have great quality installations, but at a lower price.

Our capex is going down. When we look at the 20% SKU reduction on shelves, we don't believe this is going to have any material impact on our sales.

In the contrary, that's going to leave the space for the fast-turning SKUs, because in the past, when the innovation was working, you're putting a slow turner in and the fast turner goes out of the shelf. That doesn't make much sense.

We're very, very deliberate about that. We believe we're going to see continuous uptick in our consumer business over the next couple of months.

I guess to double-click, if you can comment on the shelf resets getting into the fall, do you think that the facings, the total facings to the consumer in the US for COVERGIRL and Sally Hansen is going to hold up or how is it going to change?

Then

the color in Europe was interesting, but I'm more interested in the brands that you don't talk about. You used to have brands at least that I remember, something called Astor, Manhattan, the brands that you don't talk

about.

What is happening to them? Thank you.

Oh, I'm happily talking about them, and I come back to your first question in a second. Happily talking about them.

Astor, you still have that?

The brands that you rarely talk about. Thank you.

Manhattan is basically equivalent of Rimmel in Germany, okay? It's a same portfolio, that's just called the Rimmel brand in Germany Manhattan.

This has historical reasons. In Europe, and again, Manhattan, Max Factor, Bourjois are all brands on which we're going to bring the interventions now.

We haven't done it on these brands in Europe yet, okay? It's coming, we hopefully can replicate the US success model.

When it comes to shelf space and shelf resets, we have mostly managed to have stable shelf space. Shelf space is always under threat if your sell-out is not great, but the improvements we have been in Q4, this is the time when selling shares are being decided.

We have lost a bit, we have gained a bit, but overall, we should be stable. We don't see a big risk from losing shelf space or anything like this for the time being.

Hi, good morning. Thank you so much for the question.

Good afternoon as well. I was wondering if you can comment on the promotional environment here.

You mentioned in fiscal 2026 it has been elevated throughout the year. Just wondering as well, in terms of competitors' actions here, we've seen some pricing reductions being taken, and then pricing being elevated again, and curious for your take on some of the competitor actions in the mass side in particular.

Thanks so much.

On pricing, things are going a little bit back and forth. We have seen in prestige, we have seen a lot of pricing competition in the key holiday season, from October to December, but this has abated a bit ever since then, which actually is good.

In consumer, I think what we're doing, saying, "Okay, instead of going up in price or down or being broad-based, but being much more surgical, okay? What type of business, what type of SKU can I support a higher price, and what kind of SKUs I cannot support a higher price, right?

That differentiation is, I think, going to help stabilize this pricing and promotion environment a little bit in the next couple of months."

Great. Then in terms of your strategic review for the Consumer Beauty business by the end of calendar 2026, is that really a hard deadline?

Is that something you're working toward, but there's room to see if there's maybe not an agreement made by that time? Curious on just how flexible you are there.

Thank you.

I know I'm sticking my neck out on this 2000 2026 thing. It's our very, very, very, very strong aspiration to get it done by then.

At the end of the day, if the results are 10 times better if we have another month, then yeah, of course, we would do that. It's our intent to finish this by calendar 2026.

Hi, good morning. Thanks for taking my questions.

I guess maybe to dig in a little deeper on the Consumer Beauty business, particularly the improvement you saw in the US with COVERGIRL and Sally Hansen. I guess, just curious, is it better marketing, sharper price points?

Are you guys being more promotional there, or is it new innovation? I guess maybe just a little bit of color on what's driving that, and then just the performance internationally versus the US.

Thanks.

Yeah. I think it's actually on the contrary, it's less driven by promotion, it's more driven by equity-building advertisings, because on brands like COVERGIRL or Sally Hansen, we have been in and out of advertising over the years, but we have made a choice to concentrate our funds in really equity-building advertising.

We're back on television with COVERGIRL, mentioned that we are targeting Gen X. Gen X still watches television quite a lot, we're back nationally on air, and we are focusing our efforts on our two biggest franchises, which is Simply Ageless and Lash Blast.

Really focusing on the core, and on COVERGIRL is really helped us dramatically to improve the gap, the sell-out gap versus the category, and we're getting now very close. Same thing on Sally Hansen.

We're back on national advertising on Sally Hansen in the nail care category, coupled with some very good innovation like our Insta-Dri innovation has found an extremely good reception. If I have to sum it up, I think where we going with Coty Curated and Color the Future is much more putting the money where we have a return and where we also have long-term equity building to drive our brands and drive our core franchises versus competing everywhere and in every SKU and so on.

I would say focus and focused spending.

Great. Then just the performance internationally versus the US, because I think you noted that mass body and skin care helped to drive the growth, I guess was that the Brazilian business as well?

Thanks.

Brazil is also back to growth, which is where the body and skin care part comes from. Brazil, it's had a bit of a wobble at the beginning of the year, but they're doing well now.

They're back, the market is growing. We are growing and we are about to grow share again in Brazil, so that's going in the right direction.

Again, Europe, I think I have mentioned on the question before, where we're not as far advanced yet in the implementation as we were in the US, but we see the US working and now obviously we're going to replicate this in Europe. Good initial response on Rimmel in the UK.

Great. Thank you very much.

Laurent, thanks for me as well for your help over the years. Markus, I wanted to ask on, you explicitly stated the goal of returning the underlying portfolio excluding Gucci to growth in fiscal 2028.

There are a lot of balls in the air as we think about fiscal 2027, but I guess I just wanted to get a better sense of your confidence around that goal, and I guess the key building blocks, the most critical assumptions or the things that we should be looking for to develop over the course of 2027 to be able to hit that target.

I think Steve, there's two or three points that are extremely important. One of them is for us really the focus on our big brand franchises, okay?

The role that every brand franchise plays in our portfolio. For example, our big global brands, Burberry, Hugo Boss, there's no excuse if we don't grow.

We got to make these products grow, and for us, one of the most important thing, apart from focusing and spending the money on them, is to create more incremental innovation that creates a halo effect on the total business. We have not done that as successfully last year because our innovation has been performing well, but it was not incremental enough, it didn't create a halo.

If you want an example on Hugo Boss, where we had a very good launch with BOSS Bottled Elixir, I think the top two male launches of the year, doing very well, building share in the US, but it hasn't turned up the total franchise. Starting in travel retail BOSS Beyond for Her, woman, right?

We're creating a female business for Hugo Boss, which obviously by definition is going to be incremental. We have constructed it in a way and tested it and confirmed it in a way that every dollar that we spend on the female campaign has a halo effect on the male campaign as well.

That's kind of the way to look at our big brands and our innovation, construct innovation for incrementality and also better for the total halo effect. Then, playing our portfolio where the strengths are.

Again, big global brands, and then we have probably more regional brands at the moment in Marc Jacobs, where we are very strong in English-speaking countries, US, UK, even Australia, where we have actually double-digit fragrance growth in the last six months, and now we're bringing the makeup, the cosmetics line on top. We're concentrating it on the markets where we can win with this proposition.

It's all about focused investment, having a right to win, and incremental innovation that creates a halo effect.

Yes, very good. Okay.

Thank you very much. If I could ask a follow-up.

You mentioned efforts underway to develop plans to moderate the sales and profit impacts as we look to fiscal 2028 from the Gucci departure. I guess how much of that planning is dependent on the rest of the portfolio resuming growth, as we just talked about, versus you being able to actually restructure some costs specifically to mitigate the financial impacts through restructuring?

How much is growth-oriented versus cost out, if that makes sense?

What we trying to do, I think on this one, we are trying to go with belts and suspenders, okay? We're going to grow these brands.

That's a big part of the building blocks. We also bringing new brands like Swarovski, Etro next year.

We want to make sure, and this is our intention, that our cost savings program, restructuring program alone can cover the gap. That is our intention, okay?

Because if we achieve that and we bring the growth on top of our big global brands, I think then we're going to be in very good shape, right? It's a belt and suspender approach, and hopefully all these activities are going to add up to more than what we need, because in the end, you always get a little bit less, and then it's going to be good, no?

That's our approach, no? You will hear more about our restructuring program in the next few months because we also still working on the study for the consumer business.

There are a lot of interdependencies, we just want to come to the market once and say this is it, this is what we're going to do, and then it's execution.

Great, thanks. I'm not sure how much you can share, but can you give us an update on the strategic review of Consumer Beauty that you expect to be done by calendar year-end?

In the past, you had flagged that Brazil would be a cleaner exit, potentially, versus the US business. Just a little bit of more color there would be great.

Thank you.

We mentioned in the past that obviously Brazil is very ring-fenced and it would be easier in isolation, but we're not looking for necessarily the clean and easy, we're looking for the best solution that creates the most value for us. We keep working on the future review as a total, including everything in consumer.

Got it, thanks. Then you just mentioned to Steve about the plan with respect to Gucci and absorbing the incremental cost, and how you will look at costs overall.

Now that we know that it's low-double-digit percentage of sales with healthy profit, can you give us a sense on some of the specific actions you're going to take to minimize the overhead challenges? Presumably some of that cost may go to L'Oréal, but maybe not very much.

I understand that you'll be satisfying the inventory for a period of time, but just given that they probably don't need a ton of hand-holding in this category beyond the initial inventory, what can be done?

I I would imagine they're not don't need too much hand-holding. You definitely got that right.

I think, first of all, we're super happy with the deal we made with Kering, because it was our objective, and we did it in our terms. It was really our objective to get full compensation of a year of profit and cash.

We wanted to get funds that help us to pay down debt, and we wanted to, also get some some money to help us with restructuring, plus we wanted to solve the inventory question. All of these things have been addressed.

That's why we are that's why we happy with that with that deal. When it comes to our fixed-cost savings, there's obviously quite a chunk of money in allocated overhead, okay?

Because the way you have to look at the business is that we have in in Prestige, we have a scaled R&D organization, we have a scaled manufacturing, distribution organization, and, we also have our central team, all the corporate functions, they're all working for Prestige. With a brand in the low double-digit teens, that's that's quite that's quite a sizable money.

We're looking at a at a very serious restructuring program that will encompass our go-to-market setup, manufacturing and distribution network, a continuous delayering of the organization, which we have started anyway to get to faster decision-making, more agility, and of course, also a right-sizing of our central organization to reflect initially lower sales.

Hi. Thanks for taking our question.

You've now built market share into the fiscal 2027 incentive structure to help reinforce the sell-out culture. How are you thinking about making sure that doesn't inadvertently encourage chasing volume promotionally in a market that's already quite competitive?

Just curious what guardrails you have in place so the comp structure and the margin discipline stay aligned. Thank you.

Yeah. No, our total bonus structure, which I'm not going to go into the details, probably would take half an hour to explain this, has market share as a big KPI, but there's also a sales component and there's an EBITDA component.

There's a very, very strong EBITDA component, we cannot just willy-nilly do promotion to increase sales where it comes at the expense of profit, right? I think the way it is calibrated, I think we have done a decent job to put the guardrails already into the design of the program.

Why we believe that this is superior is if you just focus on sales, especially then end of the year, end of the quarter, and people are starting selling stuff in that doesn't sell out, then you get exactly to these wide swings in inventory that we want to avoid. We want to have sell-out growth, but sell-out growth then pretty much in line with sell-in so that we get out of these inventory swings.

Okay?

Thank you, and good morning. Laurent, I want to extend also my gratitude and wish you well.

Just thinking of what you discussed about the Consumer Beauty brands, you obviously had said that you want to maximize returns and make bigger bets, but you also mentioned that some of the European brands, you want to also reinvest, like Bourjois, I think you mentioned Manhattan in the sporty, if I'm not mistaken, but just to make sure that we understand. Layering that with that strategic review for Consumer Beauty in the middle of this kind of promotional environment, I was just wondering how to think through the end of the calendar year, which is the first half, how we should be thinking of that improvement.

In terms of I believe you mentioned a number of SKUs that you're going to be taking out, is that something you will implement and what is the timeline for that?

No, I think here we go. Again, when you look at the investment profile and how we're running this, again, US, we are investing into advertising, equity building.

We intend to do this in Europe as well, but again, we are behind in Europe. This is, no matter what the outcome of the strategic review is, this is the right thing to do.

Either, this is the way we create value. We have a better business, we create value for ourselves or we create value for somebody else, and that value will be reflected at one point in time.

What we're doing, I think, is spot-on and it's going to put us in a better position in any scenario. When it comes to the SKUs, it's basically part of the shelf resets that happen in spring and in fall.

That's when we're going to be executing this in the next few months, no?

Have you quantified that helpful, because to be fair, this has happened for the last decade, right? This is natural for a lot of the CPGs, in particular in beauty, you're going to always have to take down as you layer innovation.

What is different now and what is the actual percentage of SKUs that you're taking out, and how much you're losing shelf space? I'm assuming that comes at a cost of losing shelf space.

I think this is not necessarily directly related. It can be at times, but it doesn't have to, because at the end of the day, every retailer is also interested to have turns on the shelf of high-volume SKUs.

If you take a slow-moving SKU out and then suddenly you negotiate for two facings for the fast-moving SKU, this helps everybody. It helps the manufacturer and helps the retailer.

It's a very detailed, fine-tuned discussion, retailer by retailer, almost like store by store, to have the right assortment for the retailer, have the right assortment for the store, because what you want to see is turns on the shelf, right? Products that don't turn are not helpful for anybody.

Okay.

Thank you for taking the question. This is Julia Shelanski on for Oliver Chen.

I'm curious, as you think about the upcoming innovation calendar, how important is the ongoing recovery in travel retail versus realizing the full potential of those launches versus what you're seeing in domestic and specialty channels? Thank you.

Excuse me, can you just say that again, because I have just had a very bad connection for a second here. I should come to the other side of the table to the microphone.

Can you just ask the question again? I'm sorry.

Yeah.

Yes. Apologies.

As you think about the upcoming innovation calendar, how important is the recovery in travel retail to realizing the potential of those launches versus what you're seeing in domestic and specialty channels?

No, I think travel retail is an important channel for us, because travel retail is not only there to create sales, travel retail is there to create the image. That's why we have, like I told you in the example with BOSS for Her, we have started in travel retail, because you can get amazing space, and the travel retailers see their stores, especially in the airports, more as drawing consumers in.

In the past, when things in the airport were cheaper than domestic, people went in there for the price. That's no longer the case.

Now they go in there for the entertainment, for the in-store presence, for what's happening in the store. If you come with launches in travel retail, you can get amazing placement, because you're helping the retailer to stop the travelers and get them into the store.

In return, it gives you a very good image, because you don't have two or three SKUs on a shelf. You have a big display or very nice stands with the beauty consultants and so on and so on.

I think travel retail for us is important, and travel retail for us is actually growing nicely.

Great. Thank you for the color.

Before we wrap this up, let me just reiterate a few points. Just be very clear.

We had good improvements this quarter, but we obviously not satisfied at all with our current level of performance, but we know what it takes to make this better. We have strong brands, leading positions in attractive categories, and a clear framework to strengthen execution.

While we've given guidance for Q1 only, we are targeting to deliver fiscal '27 EBITDA and free cash flow close to fiscal '26 levels. Priorities are straightforward: improve the sell-out, close the gap to market, strengthen profitability.

We are implementing the changes needed to achieve those objectives, and we will continue to act with focus and urgency. Thank you for your continued interest in Coty, and thank you for joining us today.

Have a great rest of your day.