Coty Centralizes Prestige Control, but Risk Profile Unchanged

What happened

Coty announced organizational changes under its Coty.Curated strategy, centralizing commercial decision-making and putting Executive Chairman Markus Strobel directly in charge of Prestige operations. This aims to speed up decision-making and better align with market dynamics. However, FY25 revenues fell 4%, net losses widened on impairments, Consumer Beauty remains structurally loss-making, and leverage is high at 4.2x net debt/EBITDA. The reorganization signals a more hands-on approach from leadership but does not alter the fundamental risk profile of a highly leveraged company facing tariff headwinds and execution risk. Investors should remain cautious until evidence of sustainable revenue growth and deleveraging emerges.

Implication

The centralization may improve Prestige execution and accelerate cost savings, but given high leverage and ongoing consumer beauty losses, a clear margin of safety is absent. The stock remains a speculative turnaround until evidence of stabilization and deleveraging emerges.

Thesis delta

The structural changes signal management acknowledgment of execution issues but do not materially alter the risk/reward; stance remains WAIT as evidence of stabilization is still needed.