Coty (0I4A) Risk Analysis
Risk Overview Q2, 2026
Source: the company's latest filing for the period ended Jun 30, 2026, filed Aug 20, 2026
Risk Change Over Time
- Corporate Activity and Growth - Risk 1Potential divestitures, and any retained liabilities from such sold business, could negatively impact our business and financial results.
As previously announced, we are conducting an ongoing a strategic review process regarding our Company's consumer beauty business, including its mass color cosmetics business and associated brands and the Company's distinct Brazil business comprised of local Brazilian brands. Our strategy also includes executing on our brand repositioning and continuing to focus our brand-building efforts on priority categories, channels and markets, including a focus on our fragrance expertise and profitable adjacent categories. In addition, we continue to prioritize our deleveraging objectives. In the future, we may dispose of or discontinue select brands and/or streamline operations, and dispose of select businesses or interests therein (including through strategic transactions or public offerings) and incur costs or restructuring and/or other charges in doing so. We may face risks of declines in brand performance and license terminations, due to expirations and/or allegations of breach or for other reasons, including with regard to any potentially divested or discontinued brands. If and when we decide to divest or discontinue any brands or lines of business, we cannot be sure that we will be able to locate suitable buyers or that we will be able to complete such divestitures (including through strategic transactions or public offerings) or discontinuances successfully, timely, at appropriate valuations and on commercially advantageous terms (including with respect to retained liabilities), or without significant costs, including relating to any post-closing purchase price adjustments or claims for indemnification. Divestitures or discontinuations (including as a result of the termination of licenses) involve significant challenges and risks, including the need to provide transition services, and the separation of operations, systems and personnel. Any future divestitures and discontinuances could have a dilutive impact on our earnings, create dis-synergies, result in stranded costs, result in retained liabilities, structurally increase our leverage ratio through loss of earnings, reduce diversification across our brand portfolio and increase concentration risk in our remaining business, and divert significant financial, operational and managerial resources from our existing operations and make it more difficult to achieve our operating and strategic objectives. We also cannot be sure of the effect such divestitures or discontinuances would have on the performance of our remaining business or the ability to execute our global business strategies, and we may not be successful in restructuring the remaining business to address such impacts. For example, in connection with the early termination of the Gucci Beauty license, we are evaluating our central organization, manufacturing and asset base, and certain market structures to adjust our scope and size following the transition period. If we are unable to successfully or timely achieve sufficient savings, core business acceleration and portfolio expansion, we may not be able to fully mitigate the impact of the license termination on our business and performance.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 48
- Share Price & Shareholder Rights - Risk 1We are subject to risks related to our common stock and our stock repurchase program.
Any repurchases pursuant to our stock repurchase program, or a decision to discontinue our stock repurchase program, which may be discontinued at any time, could affect our stock price and increase volatility. In addition, the timing and actual number of any shares repurchased will depend on a variety of factors including the timing of open trading windows, price, corporate and regulatory requirements, an assessment by management and our Board of Directors of cash availability, capital allocation priorities, including deleveraging, and other market conditions. In addition, in 2022 and 2023 we entered into forward repurchase transactions to begin hedging for a potential $200 million repurchase under our stock repurchase program planned for the end of 2024, an additional potential $196 million repurchase under our stock repurchase program originally planned for the end of 2025 and an additional potential $294 million repurchase originally planned for 2026. In February 2024, we elected to physically settle one of the forward repurchase contracts for a cash payment of $200.0 in exchange for 27.0 million shares of our Class A Common Stock. We extended the maturity of the outstanding forward repurchase transactions until January 2027. Our decision to physically settle the outstanding forward repurchase contracts on their existing terms, or to extend the maturity or unwind such transactions, will depend on a variety of factors including market conditions, open trading windows, and our capital allocation priorities and internal cash management considerations at the time. These forward repurchase transactions expose us to additional risks related to the price of our common stock, including potential true-up payments in cash upon specified changes in the price of our common stock. Declines in the price of our common stock during fiscal 2025 and fiscal 2026 resulted in the payment of $191.1 and $194.4, respectively, in connection with these true-up obligations.
- Share Price & Shareholder Rights - Risk 2JAB Beauty B.V. ("JAB") and its affiliates beneficially own approximately 54% of the fully diluted shares of our Class A Common Stock and, as such, have the ability to effect certain decisions requiring stockholder approval, which may be inconsistent with the interests of our other stockholders.
JAB Holdings B.V. ("JABH"), through an affiliate, JAB Beauty B.V., may be deemed to beneficially own approximately 54% of the outstanding shares of our Class A Common Stock (inclusive of all voting interests of Peter Harf, the Company's former Chairman, and HFS Holdings S.à r.l, ("HFS"), which is beneficially owned by Mr. Harf). As a result, JABH has the ability to exercise control over certain decisions requiring stockholder approval, including the election of directors, amendments to our certificate of incorporation and approval of significant corporate transactions, such as a merger or other sale of the Company or our assets. In addition, three members of our Board of Directors are affiliated with JABH. Accordingly, JAB has significant influence over us and our decisions, including the appointment of management and any other action requiring a vote of our Board of Directors. In addition, this concentration of ownership may have the effect of delaying, preventing or deterring a change in control of us and may negatively affect the market price of our stock. JABH's interests may be different from or conflict with our interests or the interests of our other stockholders. JABH and its affiliates are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete indirectly with us. JABH or its affiliates may also pursue acquisition opportunities that are complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, JABH's obligations under its credit facility or other financing arrangements may cause JABH to take actions which may be inconsistent with your interests. Accordingly, the interests of JABH may not always coincide with our interests or the interests of other stockholders, and JABH may seek to cause us to take courses of action that, in its judgment, could enhance its investment in the Company but which might involve risks to our other stockholders or adversely affect us or our other stockholders.
- Share Price & Shareholder Rights - Risk 3We are a "controlled company" within the meaning of the NYSE rules and, as a result, are entitled to rely on exemptions from certain corporate governance requirements that are designed to provide protection to stockholders of companies that are not "controlled companies."
For so long as JABH and its affiliates own more than 50% of the total voting power of our common shares, we are a "controlled company" within the meaning of the NYSE corporate governance standards. As a controlled company, we are exempt under the NYSE standards from the obligation to comply with certain NYSE corporate governance requirements, including the requirements: - that a majority of our board of directors consists of independent directors;- that we have a nominating committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and - that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities. If we elect to rely on the controlled company exemptions, the procedures for approving significant corporate decisions could be determined by directors who have a direct or indirect interest in such decisions, and our stockholders would not have the same protections afforded to stockholders of other companies that are required to comply with all of the independence rules of the NYSE.
- Share Price & Shareholder Rights - Risk 4The dual-listing of our Class A Common Stock on the NYSE and on Euronext Paris's Professional Segment may adversely affect the liquidity and value of our Class A Common Stock.
Our Class A Common Stock is listed on Euronext Paris's Professional Segment ("Euronext Paris"). While the dual-listing of our Class A Common Stock was intended to promote additional liquidity for investors and provide greater access to our Class A Common Stock among investors in Europe who may be required to invest in Eurozone markets or certain currencies only, this dual-listing may dilute the liquidity of these securities in one or both markets and may adversely affect the development of an active trading market for Class A Common Stock on Euronext Paris. The price of our Class A Common Stock listed on Euronext Paris could also be adversely affected by trading in our Class A Common Stock on the NYSE. In addition, currency fluctuations between the Euro and U.S. dollar may have an adverse impact on the value of our Class A Common Stock traded on Euronext Paris. There has been, and may continue to be, limited liquidity on the Euronext Paris market. We have not appointed any market maker on the Euronext Paris market but may do so in the future. On this basis, the liquidity of our Class A Common Stock traded on Euronext Paris may be uncertain and investors on the Euronext Paris market may need to assess their ability to adjust the size of their position given the then trading liquidity prior to investing in our securities. We incur additional auditing, legal, reporting and other expenses in order to maintain a dual-listing on both NYSE and Euronext Paris, including the costs of listing on two exchanges. If our Board of Directors determines that the cost of maintaining our listing on Euronext Paris outweighs the benefits of such listing, we may incur costs associated with delisting from that exchange.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
