What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-08-21 compared with 2024-08-20 · 333 added, 311 removed, 631 unchanged (51% of the section changed)

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Our brands empower people to express themselves freely, creating their own visions of beauty;

and we are committed to making a positive impact on the planet.

Our strategic priorities include stabilizing and growing our Consumer Beauty brands through leading innovation and improved execution, accelerating our Prestige fragrance business and ongoing expansion into Prestige cosmetics, building a comprehensive skincare portfolio over the mid-to-long term leveraging existing brands, enhancing our organizational growth capabilities including digital and research and development, expanding our presence in growth channels such as the Travel Retail channel, in China and other growth engine markets (Latin America, including Brazil, the Middle East, North and South East Asia, Africa and India), and establishing Coty as an industry leader in sustainability.

and we are committed to protecting the planet.

We have sharpened our priorities to capitalize on structural tailwinds in the fragrance market.

We are leveraging our leadership in fragrance innovation, licensing, and manufacturing to expand across price points, from mass to ultra-premium and across scenting formats.

With slower growth in China’s beauty market, we have shifted focus to a broader set of emerging markets and the U.S.

In Consumer Beauty, we aim to improve performance and profitability through agile innovation, social media advocacy, and expansion into body mists and masstige fragrances.

Skincare remains a strategic focus, but achieving scale takes time, and we will pursue this while remaining very mindful of the investment demand.

We also continue to advance key sustainability priorities.

Strategic Progress

We have been making progress on our strategic priorities.

In Consumer Beauty, we have implemented the relaunch of our top brands and returned to stable growth and steady margin improvement.

Consumer Beauty net revenue grew 6% in fiscal 2024, with growth across mass fragrances, mass color cosmetics, skincare and body care led by Brazil.

We are now focusing on accelerating our digital advocacy strategy to amplify our brand and product innovations, leverage consumer analytics and insights, and improve the return on investment of our marketing activities.

Our e-commerce channel net revenues grew by over approximately 20% in fiscal 2024, with double-digit percentage growth in Prestige and Consumer Beauty.

In Prestige, we continue to accelerate the fragrance business with exceptional new launches and expansion in premium and ultra-premium categories, while steadily expanding the distribution, productivity and assortment of our Prestige cosmetics.

Our prestige cosmetics net revenues grew by a double-digit percentage in fiscal year 2024, led by Kylie Cosmetics and Burberry.

We are continuing to thoughtfully expand our skincare portfolio (which contributed a mid-single digit percentage of our fiscal 2024 net revenue) with our focus on winning over the most discerning skin care consumers in our areas of excellence – UV protection, photoaging prevention and repair, biotech-enhanced longevity science, and micro-dose formulations.

Our skincare business, which contributed a mid-single-digit percentage of sales, generated strong sales growth in fiscal year 2024.

We have successfully expanded our e-commerce capabilities, through best-in-class online launches, our digital advocacy strategy and active participation in key online shopping events, and increasing digital media competitiveness.

Revenues from our global Travel channel grew in all three regions – Americas, EMEA and Asia Pacific – contributing approximately 20% to the net revenue growth in fiscal year 2024.

Our growth engine markets net revenues grew in fiscal 2024, led by Brazil, the rest of LATAM, Southeast Asia, including India, and Africa.

In Consumer Beauty, we have implemented the relaunch of our top brands.

We are now focusing on diversifying our business by overdriving mass fragrances and adjacencies, while accelerating our color cosmetics business through digital advocacy, channel diversification and on-trend innovation, all of which is intended to step change our Consumer Beauty profitability.

In Prestige, we are accelerating our fragrance business with exceptional new launches and franchise-building extensions, expanding our premium and ultra-premium category portfolio, extending into the rapidly growing fragrance mist adjacency with multiple brands, while also enhancing the assortment of our Prestige cosmetic products.

We are continuing to thoughtfully expand our skincare portfolio (which contributed a mid-single digit percentage of our fiscal 2025 net revenue).

We continue to expand our e-commerce capabilities across our portfolio, through online launches, our digital advocacy strategy and active participation in key online shopping events.

We are adjusting our strategy in step with the beauty market evolution.

Our aim is to continue expanding our footprint and diversifying into a limited number of structurally profitable and growing beauty categories and geographic markets at scale.

We are leveraging and overdriving our leadership position and best-in-class capabilities in global fragrances to fuel strong expansion— with fragrances already constituting more than 65% of our fiscal 2025 net revenues and an even larger portion of our profits.

During the third quarter of fiscal 2025, we formulated a new plan, which was announced on April 24, 2025, to strengthen our operating model and simplify our fixed cost structure (the “Fixed Cost Reduction Plan”).

Cash costs associated with the program include restructuring and business structure realignment costs and are expected to be approximately $80.0, roughly evenly split between fiscal 2026 and fiscal 2027.

Global Economic Landscape and Business Impact

Our products are marketed, sold and distributed in approximately 123 countries and territories.

As a geographically diverse company we are susceptible to global economic trends, geopolitical conflicts, domestic and foreign governmental policies, and changes in foreign exchange rates.

In particular, economic conditions in China have had, and are expected to continue to have, an impact on our strategic initiatives, including our growth agenda in the region for Prestige products and our skincare growth priorities.

Within the China market we continue to monitor and take actions to address the impact to our Consumer Beauty brands which have experienced sales declines as retailers and distributors continue to deplete their existing inventory.

In particular, challenging economic conditions in China have had, and are expected to continue to have, an impact on our strategic initiatives including our growth agenda in the region for Prestige products and our skincare growth priorities.

We remain attentive to economic and geopolitical conditions that may materially impact our business.

We continue to explore and implement risk mitigation strategies in the face of these unfolding conditions and remain agile in adapting to changing circumstances.

Such conditions have or may have global implications which may impact the future performance of our business in unpredictable ways.

Changing market trends may impact sales of our products across and within product categories and regions.

Within our Consumer Beauty segment, positive market trends within the skin and body care and mass color cosmetics categories in Brazil positively impacted the segment's sales volume during fiscal year 2024.

Excluding the contribution from the Brazilian brands, the Consumer Beauty segment experienced a decline in sales volume primarily in the skin and body care category, as a result of a decline in sales from China, and in the color cosmetic category primarily due to negative market trends in the U.S.

in mass color cosmetics market.

We expect that our net revenue for fiscal year 2025 will grow in the mid-single digit percent to high-single digit percent versus the prior year, excluding the impact of foreign exchange and the early termination of the Lacoste fragrance license.

We anticipate that our annual gross margin will remain in the mid-sixties, providing us with opportunities to fund new product initiatives and support our brands through advertising and consumer promotional investments.

We continue to target advertising and consumer promotional spending in the high-twenties percentage of net revenues.

However, our level of advertising and consumer promotional spending will depend on various factors, including seasonality, the timing of product launches, and budgetary considerations.

Global Supply Chain Challenges

Our ability to fulfill demand for our products is critical to our success.

Through steps taken to improve order fill rates and mitigate the impact of supply chain constraints, we have seen improvements in our order fill rates on a company-wide basis.

As a result, in fiscal year 2024 we achieved close to pre-COVID-19 service levels across our divisions.

The impact of inflation on material, logistical and other costs subsided during fiscal year 2024.

Inflation may continue to impact certain costs, such as labor.

However, we currently anticipate the overall impact of inflation to remain muted.

We also continue to monitor and take actions to address the impact to our Consumer Beauty brands in China.

Recent changes in U.S.

and international trade policies—particularly tariff increases—and the ongoing uncertainty surrounding such policies may present challenges to our business operations and financial condition.

These challenges may include supply chain disruptions and commodity price volatility, resulting in increases in our cost of goods sold.

Under the current tariff framework, the biggest areas of potential challenges for us are prestige fragrances shipped to the U.S.

from our Barcelona plant, and the sourcing of various components and marketing materials from China.

In response, we have evaluated more diversified sourcing strategies, strategic pricing adjustments and cost-reduction initiatives to help offset these pressures and protect our profitability.

We are optimizing our supply chain to enhance resilience and agility in response to changing tariff

environments.

We have successfully transitioned mass fragrance production—including key brands such as Adidas, Origen, and Nautica—as well as fragrance mists to our U.S.

manufacturing site.

Additional transfers of entry-level prestige fragrance products are planned for early in the third quarter of fiscal 2026, further optimizing U.S.

In the short term, we are accelerating dual sourcing for all entry-level prestige products by leveraging regional input materials, and future launches will be developed with dual production capabilities.

We expect that any increases in our cost of goods sold will be balanced with minimal price adjustments to ensure competitiveness.

On a longer-term basis, we are evaluating expanded regionalization strategies, including potential additional U.S.

We will also continue to collaborate with external partners to strengthen our domestic manufacturing capabilities, supporting our goal of a robust, U.S.-based supply chain.

We estimate additional costs related to tariff increases to be around approximately $70.0 before any mitigating actions taken by the Company.

We expect that certain non-price related mitigating actions will offset $15.0-$20.0 of the impact from tariffs.

The vast majority of these costs are expected to be incurred in fiscal 2026, based on analyses of announcements made by the U.S.

administration including those on April 2, 2025 and on August 1, 2025, as well as announcements by U.S.

trade partners.

Despite our efforts, reductions in consumer confidence and discretionary spending could impact demand for our products and negatively affect our sales.

We are closely monitoring developments, evaluating potential impacts, and proactively taking steps to mitigate adverse effects on our business.

Market Trends and Sales Performance

Changing market trends continue to impact sales of our products across and within product categories and geographic regions.

• Fragrances :

We believe fragrances will remain a structurally advantageous category, supported by beauty category-leading brand loyalty, strong consumer demand, increasing usage, broader price points and formats, and expanding global penetration.

In fiscal 2025, our fragrance category experienced low-single digit percentage net revenue growth compared to the previous fiscal year, driven by high-single digit percentage, but decelerating, growth in the overall fragrance market.

Net revenues from prestige fragrances increased by a low-single digit percentage in fiscal 2025, reflecting a deceleration in growth compared to the prior year, as the contribution from our fragrance innovation this fiscal year was more moderate than the contribution from major innovations in the previous fiscal year.

With a slate of new launches scheduled for fiscal 2026 and beyond, we believe that our prestige fragrances are strategically positioned to achieve sustained growth and strong momentum across key markets.

Within our Consumer Beauty segment, we are planning exciting new fragrance launches and strategic retail partnerships, expanding our mass fragrance presence into value segments.

By innovating with leading brands and leveraging high-performing digital channels, we believe we are well positioned to build awareness and fuel demand.

• Color Cosmetics :

Our net revenues from mass color cosmetics declined by low-double digits percentage during the same period due to a weakening in market demand, particularly in the United States and in several European markets.

Our net revenues from prestige color cosmetics declined by a double-digits percentage, impacted by economic conditions in Asia affecting a key brand in the region.

• Skin and Body Care :

Our skincare portfolio contributed a mid-single digit percentage of our fiscal 2025 net revenue.

Competitive pricing actions in Brazil negatively impacted demand for certain of our deodorant brands leading to a high-double digit percentage decline in our body care net revenues during fiscal 2025, despite positive trends in the overall mass body care market.

Positive, but decelerating, market trends in Brazil have supported volumes in the overall Consumer Beauty business, despite having a negative impact on the segment’s gross and operating margins.

• Geographic Regions :

Net revenue in the Americas declined by a high-single digit percentage during fiscal 2025, driven by softness within the color cosmetics market in the United States.

Net revenue from EMEA increased by a low-single digit percentage due to decelerating growth across most European markets.

Net revenue in the Asia Pacific region declined by a high-single digit percentage in fiscal 2025, impacted by continued economic challenges in China affecting certain of our brands, and a decline in sales in the Asia Travel Retail channel.

Asia Travel Retail channel sales were negatively affected by regulatory restrictions in Asia aimed at formalizing cross-border shopping, which reduced daigou (surrogate shopping) purchases.

We expect that some of the market trends may continue into fiscal 2026.

Financial Outlook

We expect that our reported net revenue for the first half of fiscal 2026 will decline in the low-single digit percentage versus the prior year, which includes an estimated low-single digit percentage benefit from foreign exchange.

We anticipate that our first half fiscal 2026 gross margin will be pressured as a result of lower sales as well as the net impact from tariffs, with some easing in the second half fiscal 2026 as a result of mitigation efforts.

We are re-accelerating our cost reduction efforts across to deliver savings of approximately $80.0 in fiscal 2026.

We expect that our reported net revenue for the second half fiscal 2026 will return to growth versus the prior year, supported by major launches across both our Prestige and Consumer Beauty segments and more favorable comparisons.

Selected Financial Data

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Restructuring costs 76.7 36.7 (6.5)

Acquisition- and divestiture-related costs — — 14.7

Asset impairment charges 212.8 — —

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Other expense (income), net 371.7 90.2 (419.0)

Income from continuing operations before income taxes 204.5 704.8 426.8

Provision for income taxes on continuing operations 95.1 181.6 164.8

Net income from continuing operations 109.4 523.2 262.0

Net income from discontinued operations — — 5.7

Net income 109.4 523.2 267.7

Net income attributable to Coty Inc.

(Loss) income before income taxes (344.8) 204.5 704.8

Provision for income taxes 5.4 95.1 181.6

Net (loss) income (350.2) 109.4 523.2

Net (loss) income attributable to Coty Inc.

$ (367.9) $ 89.4 $ 508.2

Amounts attributable to Coty Inc.:

Net income from continuing operations attributable to common stockholders $ 76.2 $ 495.0 $ 55.5

Net income from continuing operations attributable to common stockholders $ 76.2 $ 495.0 $ 61.2

Net (loss) income attributable to common stockholders $ (381.1) $ 76.2 $ 495.0

Per Share Data:

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per common share:

Basic income from continuing operations $ 0.09 $ 0.58 $ 0.07

Basic income from discontinued operations $ 0.00 $ 0.00 $ 0.01

Basic income for Coty Inc.

$ (0.44) $ 0.09 $ 0.58

Diluted income from continuing operations $ 0.09 $ 0.57 $ 0.07

Diluted income from discontinued operations $ 0.00 $ 0.00 $ 0.01

Diluted income for Coty Inc.

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Net cash provided by operating activities $ 492.6 $ 614.6 $ 625.7

Net cash (used in) provided by investing activities (226.2) (118.2) 269.7

Net cash used in investing activities (128.4) (226.2) (118.2)

Net cash used in financing activities (426.8) (336.7) (469.3)

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Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with GAAP, we use non-GAAP financial measures for continuing operations and Coty Inc.

To supplement the financial measures prepared in accordance with GAAP, we use non-GAAP financial measures for Coty Inc.

including Adjusted operating income (loss), Adjusted EBITDA, Adjusted net income (loss), and Adjusted net income (loss) attributable to Coty Inc.

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We provide disclosure of the effects of these non-GAAP financial measures by presenting the corresponding measure prepared in conformity with GAAP in our financial statements, and by providing a reconciliation to the corresponding GAAP measure so that investors may understand the adjustments made in arriving at the non-GAAP financial measures and use the information to perform their own analyses.

Adjusted operating income/Adjusted EBITDA from continuing operations excludes restructuring costs and business structure realignment programs, amortization, acquisition- and divestiture-related costs and acquisition accounting impacts, stock-based compensation, and asset impairment charges and other adjustments as described below.

Adjusted operating income/Adjusted EBITDA excludes restructuring costs and business structure realignment programs, amortization, acquisition- and divestiture-related costs and acquisition accounting impacts, stock-based compensation, and asset impairment charges and other adjustments as described below.

For adjusted EBITDA, in addition to the preceding, we exclude adjusted depreciation as defined below.

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and Adjusted net income attributable to Coty Inc.

per common share are adjusted for certain interest and other (income) expense items and preferred stock deemed dividends, as described below, and the related tax effects of each of the items used to derive Adjusted net income as such charges are not used by our management in assessing our operating performance period-to-period.

per common share are adjusted for certain interest and other (income) expense items, as described below, and the related tax effects of each of the items used to derive Adjusted net income as such charges are not used by our management in assessing our operating performance period-to-period.

Adjusted Performance Measures reflect adjustments based on the following items:

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• Restructuring and other business realignment costs:

We have excluded costs associated with restructuring and business structure realignment programs to allow for comparable financial results to historical operations and forward-looking guidance.

We have excluded costs associated with restructuring and business structure realignment programs to allow for comparable financial results to historical operations and forward-looking

In addition, the nature and amount of such charges vary significantly based on the size and timing of the programs.

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Any future acquisitions may result in the amortization of additional intangible assets.

• Gain on sale and termination of brand assets and early license termination:

We have excluded the impact of gain on sale and termination of brand assets and early license termination as such amounts are inconsistent in amount and frequency and are significantly impacted by the size of the sale of brand assets and early license termination.

• Gain or loss on sale and early license termination:

We have excluded the impact of gain or loss on sale and early license termination as such amounts are inconsistent in amount and frequency and are significantly impacted by the size of the sale and early license termination.

• Costs related to market exit:

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Further, we have excluded the change in fair value of the investment in Wella, as well as expenses related to potential or actual sales transactions reducing equity investments, as our management believes these unrealized (gains) and losses do not reflect our underlying ongoing business, and the adjustment of such impact helps investors and others compare and analyze performance from period to period.

We have excluded the gain on the exchange of Series B Preferred Stock.

Such transactions do not reflect our operating results and we have excluded the impact as our management believes that the adjustment of these items supplements the GAAP information with a measure that can be used to assess the sustainability of our operating performance.

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This adjustment represents the impact of the tax effect of the pretax items excluded from Adjusted net income.

The tax impact of the non-GAAP adjustments is based on the tax rates related to the jurisdiction in which the adjusted

items are received or incurred.

The tax impact of the non-GAAP adjustments is based on the tax rates related to the jurisdiction in which the adjusted items are received or incurred.

Additionally, adjustments are made for the tax impact of any intra-entity transfer of assets and liabilities.

• Deemed Preferred Stock Dividends:

We have excluded preferred stock deemed dividends related to the First Exchange and the Second Exchange (as disclosed and defined in Note 27—Related Party Transactions in our Annual Report on Form 10-K for fiscal 2023) from our calculation of adjusted net income attributable to Coty Inc.

These deemed dividends are nonmonetary in nature, the transactions were entered into to simplify our capital structure and do not reflect our underlying ongoing business.

Management believes that this adjustment helps investors and others compare and analyze our performance from period to period.

Also, in connection with our market exit in Russia, we have adjusted for the release of tax charges previously taken related to certain direct incremental impacts of the decision.

Constant Currency

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Period of acquisition, divestiture, termination, or market exit Acquisition, divestiture, termination, or market exit Impact on basis of 2025/2024 presentation Impact on basis of 2024/2023 presentation

Third quarter fiscal 2023 Market Exit from Russia First and second quarters fiscal 2023 net revenue excluded.

Third and fourth quarters fiscal 2022 net revenue excluded.

Third quarter fiscal 2023 Market Exit from Russia N/A First and second quarters fiscal 2023 net revenue excluded.

Third quarter fiscal 2024 Termination:

Lacoste Third and fourth quarters fiscal 2023 net revenue excluded.

Lacoste First and second quarters fiscal 2024 net revenue excluded.

Third and fourth quarters fiscal 2023 net revenue excluded.

When used herein, the term “Acquisitions,” “Divestitures,” “Terminations,” and “Market Exit,” refer to the financial contributions of the related acquisitions or divestitures, early license terminations, and market exits shown above, during the period that is not comparable as a result of such acquisitions or divestitures, early license terminations, and market exits.

Unless otherwise noted, the following section pertains to the results of continuing operations.

Consolidated Fiscal 2025 as Compared with Fiscal 2024

In fiscal 2025, net revenues decreased 4%, or $225.1, to $5,892.9 from $6,118.0 in fiscal 2024.

Excluding net revenue from the first half of the prior period from Lacoste, net revenues decreased 3% or $196.5 to $5,892.9 from $6,089.4, reflecting a decrease in unit volume of 2%, and a negative foreign currency exchange translation impact of 1%.

The overall decrease in net revenues reflects declines within color cosmetics across both our Prestige and Consumer Beauty segments— primarily due to negative market trends in the United States, China, and across several European markets— and as a result of a decline in the Travel Retail Asia channel due to regulations impacting surrogate shopping purchases.

The decline can also be attributed to mass body care in Brazil— primarily due to competitive pricing action in the Brazilian deodorant market— and from prestige skincare due to negative performance from certain brands.

These declines were partially offset by growth in our prestige and mass fragrance categories due to the positive, but decelerating, market trends in most major markets and geographical expansion of certain brands.

Net revenues declined in the Americas and Asia Pacific but grew within Europe, the Middle East and Africa (EMEA) region.

Digital and e-commerce channel sales declines also contributed to the decrease in net revenues.

Consolidated Fiscal 2024 as Compared with Fiscal 2023

In fiscal 2024, net revenues increased 10%, or $563.9, to $6,118.0 from $5,554.1 in fiscal 2023.

Excluding net revenue from the first half of the prior period from Russia and the second half of the prior period from Lacoste, net revenues increased 12% or $654.3 to $6,118.0 from $5,463.7, reflecting a positive price and mix impact of 9%, an increase in unit volume of 2%, and a positive foreign currency exchange translation impact of 1%.

The overall increase in net revenues reflects growth in our prestige fragrance category due to the continued success of fragrance brands, specifically Burberry, Hugo Boss, Calvin Klein,

Gucci, Chloe, Davidoff, Joop, and Marc Jacobs, as well as innovation from the launches including Marc Jacobs Daisy Wild and Cosmic Kylie Jenner, and positive performance in the prestige cosmetics category.

The overall increase in net revenues for the Consumer Beauty segment was due to positive performance in the color cosmetics category specifically from Rimmel Manhattan and Risque , mass fragrance category specifically from David Beckham and Bruno Banani , and the skin and body care categories in Brazil, specifically from Monange , Paixao and Bozzano .

The overall increase in net revenues reflects growth in our prestige fragrance category due to the continued success of fragrance brands, specifically Burberry, Hugo Boss, Calvin Klein, Gucci, Chloe, Davidoff, Joop, and Marc Jacobs , as well as innovation from the launches including Marc Jacobs Daisy Wild and Cosmic Kylie Jenner , and positive performance in the prestige cosmetics category.

The overall increase in net revenues for the Consumer Beauty segment was due to positive performance in the color cosmetics category specifically from Rimmel Manhatta n and Risque , mass fragrance category specifically from David Beckham and Bruno Banani , and the skin and body care categories in Brazil, specifically from Monange, Paixao and Bozzano .

The overall increase in net revenues reflects the continued success of our pricing and revenue management strategies, including the implementation of price increases across our product portfolio earlier in the fiscal year.

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Digital and e-commerce channel sales growth also contributed to the increase in net revenues.

In fiscal 2023, net revenues increased 5%, or $249.7, to $5,554.1 from $5,304.4 in fiscal 2022.

Excluding net revenue from the second half of the prior period from Russia, net revenues increased 6% or $276.8 to $5,554.1 from $5,277.3, reflecting a positive price and mix impact of 11% partially offset by a negative foreign currency exchange translation impact of 5%.

Net revenues grew across both our segments.

The growth in our Consumer Beauty segment was due to positive performance across the body care, skincare, and color cosmetics categories.

Growth in our Prestige segment was primarily due to the positive performance in the prestige fragrance category due to the continued success of fragrance brands such as Burberry, Calvin Klein, Hugo Boss, Gucci, and Marc Jacobs .

Although, the prestige make up category was negatively impacted by COVID-19 related to the lockdowns in China in the earlier portion of the fiscal period, this category began to show recovery in the last quarter of the fiscal period.

The overall increase in net revenues reflects the successful implementation of global price increases across all product categories, our product premiumization strategy, and positive overall market trends.

Net revenues also grew across all of our major geographic regions led by growth in the U.S.

Additionally, there was an increase in travel retail sales in all major regions due to increased leisure travel in the period.

The overall increase in net revenues was partially offset by the negative impact of foreign exchange headwinds on net revenues, primarily affecting the euro and British pound.

Our exit from Russia impacted the overall change in our reported net revenues.

Considering total fiscal 2023 year-to-date net revenues from Russia in both the current and prior fiscal 2022 period, the net negative impact on our fiscal year-to-date reported net revenue was approximately 1% on a consolidated basis, 1% for our Prestige division, and 1% for our Consumer Beauty division.

Year Ended June 30, Change %

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Total $ 5,892.9 $ 6,118.0 $ 5,554.1 (4 %) 10 %

In fiscal 2025, net revenues in the Prestige segment decreased 1%, or $37.1 to $3,820.2 from $3,857.3 in fiscal 2024.

Excluding net revenue from the first half of the prior period from Lacoste, net revenues remained relatively flat or decreased $8.5 to $3,820.2 from $3,828.7, reflecting a positive price and mix impact of 3% (primarily due to positive pricing impact as a result of prior year period price increases and in line with overall premiumization strategy), partially offset by a decrease in unit volume of 3% (primarily due to negative performance for prestige cosmetics brands) The decrease in net revenues primarily reflects:

• Prestige cosmetic sales declines of $55.3, primarily due to declines in sales volumes in the Asia Travel Retail channel from Gucci makeup and as a result of regulations impacting the surrogate shopping purchases, and declines in sales from Kylie makeup as a result of less innovations and negative market trends in the category;

• Prestige skincare sales declines of $18.1, primarily due to negative performance from philosophy .

These decreases were partially offset by:

• Prestige fragrance sales growth of $64.9, due to successful performance from the existing fragrance lines of Burberry , Gucci, Chloe , and Hugo Boss .

In addition, continued brand innovation such as Gucci Flora Gorgeous Orchid , Burberry Goddess Intense , Boss Bottled Absolu, Chloe Signature Intense, Kylie Cosmic 2.0 , and Burberry Hero EDP Intense contributed to the category sales growth.

The category sales growth was partially offset by declines in Calvin Klein due to a reduction in certain channel sales and tight inventory management from certain retailers, declines in Tiffany & Co.

as a result of negative performance and no innovation in the current period, declines in philosophy resulting from negative performance, as well as due to the expiration of the Roberto Cavalli license in the prior year.

The overall category sales growth from existing brands can also be attributed to positive, but decelerating, market trends in most major markets.

In fiscal 2024, net revenues in the Prestige segment increased 13%, or $436.8, to $3,857.3 from $3,420.5 in fiscal 2023.

Excluding net revenue from the first half of the prior period from Russia and the second half of the prior period from Lacoste, net revenues increased 15% or $508.5 to $3,857.3 from $3,348.8, reflecting a positive price and mix impact of 8% (primarily due to positive pricing impact as a result of price increases and in line with overall premiumization strategy), an increase in unit volume of 6% (primarily due to successful innovations and positive trends in the prestige fragrance category in many markets), and positive foreign currency exchange translation impact of 1%.

Excluding net revenue from the first half of the prior period from Russia and the second half of the prior period from Lacoste, net revenues increased 15% or $508.5 to $3,857.3 from $3,348.8, reflecting a positive price and mix impact of 8% (primarily due to the positive pricing impact as a result of price increases and in line with overall premiumization strategy), an increase in unit volume of 6% (primarily due to successful innovations and positive trends in the prestige fragrance category in many markets), and positive foreign currency exchange translation impact of 1%.

The increase in net revenues primarily reflects:

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Prestige fragrance sales grew in major markets such as the United States, Germany, Australia, and Spain as well as through travel retail channel sales across all regions.

This growth was partially offset by lower net revenues for the Lacoste brand in the first six months of the current period, which was primarily due to the early license termination resulting in a wind down of

sales through the end of the second quarter;

and no net revenues for the Bottega Veneta brand in the current period due to the ending of our licensing arrangement where sales of the brand ended in fiscal 2023;

This growth was partially offset by lower net revenues for the Lacoste brand in the first six months of fiscal 2024, which was primarily due to the early license termination resulting in a wind down of sales through the end of the second quarter;

and no net revenues for the Bottega Veneta brand in fiscal 2024 due to the ending of our licensing arrangement where sales of the brand ended in fiscal 2023;

• Prestige cosmetic sales growth of $24.5, primarily due to brand innovation from Kylie Cosmetics.

In fiscal 2023, net revenues in the Prestige segment increased 5%, or $152.6, to $3,420.5 from $3,267.9 in fiscal 2022.

Excluding net revenue from the second half of the prior period from Russia, net revenues increased 6% or $169.0 to $3,420.5 from $3,251.5, reflecting a positive price and mix impact of 11% (primarily due to the positive pricing impact as a result of global price increases and in line with overall premiumization strategy) partially offset by a negative foreign currency exchange translation impact of 5%.

The increase in net revenues primarily reflects:

• Prestige fragrance sales growth of $197.9, due to the continued success of Burberry Hero , Burberry Her , Calvin Klein , Hugo Boss Boss Bottled , Gucci Flora , and Marc Jacobs Daisy , particularly in the U.S.

due to positive market trends and innovation, and in the travel retail channel sales across all major regions impacted by increased leisure travel compared to the prior year.

These increases were partially offset by:

• Prestige makeup sales decline of $18.1, primarily due to Gucci makeup travel retail channel sales in the Asia Pacific region as a result of slow recovery from the lockdowns in China;

• Prestige skincare sales decline of $10.8, primarily due to lower net revenues for philosophy due to less innovation and repositioning of the brand.

Consumer Beauty

In fiscal 2025, net revenues in the Consumer Beauty segment decreased 8%, or $188.0, to $2,072.7 from $2,260.7 in fiscal 2024, reflecting a negative price and mix impact of 3% (primarily due to higher returns and discounts and promotions in the current period), a negative foreign currency exchange translation impact of 3% (primarily driven by the weakening of the Brazilian Real versus the U.S.

dollar), and a decrease in unit volume of 2% (primarily due to negative performance for color cosmetics and body care brands, despite volume increases from most product categories in Brazil).

The decrease in net revenues primarily reflects:

• Color cosmetics sales declines of $161.7, primarily due to negative market trends in the color cosmetics market in the United States which impacted net revenues from Covergirl , Sally Hansen , and Rimmel .

Negative market trends for color cosmetics in several European markets also impacted net revenues from Max Factor , Bourjois , and Rimmel .

Category net sales declines were also impacted by increased discounts and promotions compared to the prior period;

• Mass body care sales declines of $61.4, primarily due to declines in sales volumes from Monange in Brazil due to competitive pricing action in the deodorant market and adidas due to declines in sales volumes in Mexico and Brazil.

These decreases were partially offset by:

• Mass fragrance sales growth of $27.9, due to geographical expansion of existing products from Nautica into growth-engine markets and brand innovation such as adidas Vibes ;

• Mass skincare sales growth of $7.2.

In fiscal 2024, net revenues in the Consumer Beauty segment increased 6%, or $127.1, to $2,260.7 from $2,133.6 in fiscal 2023.

Excluding net revenue from the second half of the prior period from Russia, net revenues increased 7% or $145.8 to $2,260.7 from $2,114.9, reflecting a positive price and mix impact of 5% (primarily due to positive pricing impact as a result of price increases), an increase in unit volume of 1% (primarily due to increases from Brazilian brands offsetting decreases in volumes in most other markets), and a positive foreign currency exchange translation impact of 1%.

Excluding net revenue from the second half of the prior period from Russia, net revenues increased 7% or $145.8 to $2,260.7 from $2,114.9, reflecting a positive price and mix impact of 5% (primarily due to the positive pricing impact as a result of price increases), an increase in unit volume of 1% (primarily due to increases from Brazilian brands offsetting decreases in volumes in most other markets), and a positive foreign currency exchange translation impact of 1%.

The increase in net revenues primarily reflects:

• Color cosmetics sales growth of $51.4, primarily due to the continued success of Rimmel Manhattan which saw continued brand innovation, such as Lasting Finish foundation and Thrill Seeker mascara, and Risque due to strong category momentum in Brazil and positive pricing impact, despite a category slowdown in the US;

• Mass fragrance sales growth of $46.3, due to the continued success from the re-launch of David Beckham Instinct in the current period and success of Bruno Banani ;

• Mass fragrance sales growth of $46.3, due to the continued success from the re-launch of David Beckham Instinct in fiscal 2024 and success of Bruno Banani ;

• Skin and body care sales growth of $44.6, due to the continued success of Brazilian brands Monange , Bozzano , and Paixao benefiting from strong category momentum and positive pricing impact.

This growth was partially offset by lower sales volume for adidas primarily as a result of category slowdown in China which resulted in higher trade inventory levels.

In fiscal 2023, net revenues in the Consumer Beauty segment increased 5%, or $97.1, to $2,133.6 from $2,036.5 in fiscal 2022.

Excluding net revenue from the second half of the prior period from Russia, net revenues increased 6% or $107.8 to $2,133.6 from $2,025.8, reflecting a positive price and mix impact of 10% (primarily due to the positive pricing impact as a result of global price increases) partially offset by a negative foreign currency exchange translation impact of 4%.

The increase in net revenues primarily reflects:

• Color cosmetics sales growth of $59.1, resulting from Covergirl due to positive pricing impact and higher sell-out resulting in lower returns and markdowns in the U.S., and Rimmel Manhattan due to brand innovation and positive price and mix impact in major European markets, such as Germany, Austria, Switzerland, as well as Australia.

• Skin and body care sales growth of $53.3, resulting from growth of brands in Brazil due to strong category momentum and positive product mix impact within our Brazilian brands’ portfolio, as well as due to innovation in brands such as Monange and market share gains for Paixao .

COST OF SA LES

In fiscal 2025, cost of sales decreased 5%, or $106.8, to $2,072.0 from $2,178.8 in fiscal 2024.

Cost of sales as a percentage of net revenues decreased to 35.2% in fiscal 2025 from 35.6% in fiscal 2024 resulting in a gross margin percentage increase of approximately 40 basis points, primarily reflecting:

(i) approximately 40 basis points related to a decrease in excess and obsolescence costs;

(ii) approximately 20 basis points related to a decrease in manufacturing and material costs as a percentage of net revenues, driven by increased manufacturing efficiencies, improvements in productivity, as well as procurement and material cost optimization.

The above reflects a positive impact from pricing net of inflation of approximately 70 basis points.

Despite an overall improvement, our gross margin percentage was negatively impacted by an increase in discounts and promotions— which rose by approximately 100 basis points.

This increase negatively impacted cost of sales absorption, including excess and obsolescence costs as well as manufacturing and material costs previously discussed.

In fiscal 2024, cost of sales increased 9%, or $172.0, to $2,178.8 from $2,006.8 in fiscal 2023.

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The above reflects a positive impact from pricing net of inflation of approximately 160 basis points.

In fiscal 2023, cost of sales increased 4%, or $71.6, to $2,006.8 from $1,935.2 in fiscal 2022.

Cost of sales as a percentage of net revenues decreased to 36.1% in fiscal 2023 from 36.5% in fiscal 2022 resulting in a gross margin percentage increase of approximately 40 basis points primarily reflecting:

(i) approximately 30 basis points primarily related to manufacturing and material costs due to productivity improvements;

(ii) approximately 20 basis points related to designer license fees due to favorable royalty related activity;

(iii) approximately 10 basis points related to excess and obsolescence costs.

These increases were partially offset by approximately 20 basis points in increased freight costs.

The above includes the negative impact of inflation (principally for material costs) and the positive impact from pricing, estimated at approximately 200 basis points each.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

In fiscal 2025, selling, general and administrative expenses decreased 2%, or $59.0, to $3,103.4 from $3,162.4 in fiscal 2024.

Selling, general and administrative expenses as a percentage of net revenues increased to 52.7% in fiscal 2025 from 51.7% in fiscal 2024, or approximately 100 basis points.

This increase was primarily due to:

(i) 120 basis points primarily due to the loss on the termination of the KKW Collaboration Agreement in the current period;

(ii) 120 basis points primarily due to an increase in administrative costs as a percentage of net revenues;

(iii) 30 basis points due to an increase in other general expenses;

(iv) 20 basis points due to unfavorable transactional impact from our exposure to foreign currency as a percentage of net revenues.

These increases were partially offset by the following decreases:

(i) 150 basis points due to a decrease in discretionary compensation expense for employees;

(ii) 60 basis points due to a decrease in stock-based compensation cost primarily related to a reduction in expense recognized in connection with awards granted to the CEO.

In fiscal 2024, selling, general and administrative expenses increased 12%, or $344.1, to $3,162.4 from $2,818.3 in fiscal 2023.

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(iii) 30 basis points due to favorable transactional impact from our exposure to foreign currency as a percentage of net revenues.

In fiscal 2023, selling, general and administrative expenses decreased 2%, or $63.0, to $2,818.3 from $2,881.3 in fiscal 2022.

Selling, general and administrative expenses as a percentage of net revenues decreased to 50.7% in fiscal 2023 from 54.3% in fiscal 2022, or approximately 360 basis points.

This decrease was primarily due to:

(i) 130 basis points in stock-based compensation cost primarily related to a reduction in expense recognized in connection with a prior year's grant made to the CEO;

(ii) 100 basis points due to a decrease in advertising and consumer promotional costs as a percentage of net revenues primarily related to a reduction of working media in the fiscal period;

(iii) 100 basis points due to a decrease in administrative costs as a percentage of net revenues primarily due to lower depreciation expense related to fully depreciated IT equipment and lower consulting fees;

(iv) 70 basis points due to a decrease in bad debt expense as a percentage of net revenues;

(v) 40 basis points due to a decrease in logistics costs as a percentage of net revenues.

These decreases were partially offset by the following increases:

(i) 60 basis points due to unfavorable transactional impact from our exposure to foreign currency exchange fluctuations;

(ii) 30 basis points due to gains on sale of real estate recorded in the comparative period, which represented a greater percentage of net revenues compared to the net gains recorded in the current period, which primarily related to the early termination of the Lacoste license.

OPERATING INCOME (LOSS) FROM CONTINUING OPERATIONS

In fiscal 2024, operating income from continuing operations was $546.7 compared to income of $543.7 in fiscal 2023.

Operating income as a percentage of net revenues, worsened to 8.9% in fiscal 2024 as compared to Operating income as a percentage of net revenues of 9.8% in fiscal 2023.

OPERATING INCOME (LOSS)

In fiscal 2025, operating income was $241.1 compared to income of $546.7 in fiscal 2024.

Operating income as a percentage of net revenues decreased to 4.1% in fiscal 2025 as compared to Operating income as a percentage of net revenues of 8.9% in fiscal 2024.

The decreased operating margin is largely driven by the asset impairment charges (approximately 360 basis points), a loss on the termination of the KKW Collaboration Agreement (approximately 120 basis points), higher restructuring costs in the current period (approximately 70 basis points), an increase in unfavorable transactional impact from our exposure to foreign currency (approximately 20 basis points), and an increase in other general expenses (approximately 20 basis points), partially offset by a decrease in stock-based compensation expense (approximately 60 basis points) primarily related to a reduction in expense with a prior year’s grant made to the CEO, lower cost of goods sold as a percentage of net revenues (approximately 40 basis points) and a decrease in fixed costs as a percentage of net revenues (approximately 20 basis points) primarily related to decreased discretionary compensation for employees offsetting increased administrative costs.

In addition, a greater proportion of total sales came from higher margin Prestige brands in the current year which positively benefited our operating margin.

In fiscal 2024, operating income was $546.7 compared to income of $543.7 in fiscal 2023.

Operating income as a percentage of net revenues decreased to 8.9% in fiscal 2024 as compared to Operating income as a percentage of net revenues of 9.8% in fiscal 2023.

The worsened operating margin is largely driven by gains from the early termination of the Lacoste license in the prior year (approximately 200 basis points), higher restructuring costs as a percentage of net revenues (approximately 70 basis points), partially offset by lower stock-based compensation expense (approximately 100 basis points) primarily related to a reduction in expense recognize in connection with grants made to the CEO, lower cost of sales as a percentage of net revenues (approximately 50 basis points), lower amortization expense as a percentage of net revenues (approximately 30 basis points), and lower fixed costs as a percentage of net revenues (approximately 30 basis points) primarily related to non-people costs.

In addition, the greater proportion of Consumer Beauty net revenues, including a greater proportion of revenues from our Brazilian business were from lower margin Brazil brands, compared to the prior year, negatively impacted our consolidated operating income margin.

In fiscal 2023, operating income from continuing operations was $543.7 compared to income of $240.9 in fiscal 2022.

Operating income as a percentage of net revenues, improved to 9.8% in fiscal 2023 as compared to Operating income as a percentage of net revenues of 4.5% in fiscal 2022.

The improved operating margin is largely driven by lower fixed costs as a percentage of net revenues (approximately 150 basis points) primarily due to lower depreciation expense related to fully depreciated IT equipment, lower stock-based compensation as a percentage of net revenues (approximately 130 basis points) primarily related to a reduction in expense recognized in connection with a prior year’s grant made to the CEO, lower advertising and consumer promotional spending as a percentage of net revenues (approximately 100 basis points) primarily due to a reduction in working media, and a decrease in asset impairment charges as a percentage of net revenues (approximately 60 basis points) related to the impairment of indefinite-lived intangibles recorded in the prior period.

In addition, despite a higher proportion of Consumer Beauty sales from lower margin Brazil brands in fiscal 2023 compared to the prior year, a greater proportion of higher margin Prestige product sales in 2023 positively benefited our consolidated gross margin and operating income.

Operating Income (Loss) by Segment

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(in millions) 2025 2024 2023 2025/2024 2024/2023

Operating income (loss) from continuing operations

Operating income (loss)

Prestige $ 580.6 $ 580.7 $ 483.7 — % 20 %

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In fiscal 2025, operating income for Prestige was $580.6 compared to income of $580.7 in fiscal 2024.

Operating margin improved to 15.1% of net revenues in fiscal 2024 as compared to 14.1% in fiscal 2023, driven primarily by lower amortization expense as a percentage of net revenues (approximately 40 basis points), lower cost of sales as a percentage of net revenues (approximately 40 basis points), lower fixed costs as a percentage of net revenues (approximately 30 basis points) primarily related to non-people costs.

Operating margin improved to 15.2% of net revenues in fiscal 2025 as compared to 15.1% in fiscal 2024, driven primarily by lower costs of goods sold as a percentage of net revenues (approximately 100 basis points), lower fixed costs as a percentage of net revenues (approximately 30 basis points) primarily related to decreased discretionary compensation for employees offsetting increased administrative costs, partially offset by asset impairment charges (approximately 110 basis points) and an increase in other general expenses (approximately 20 basis points).

Our prestige operating income margin was positively impacted by a higher proportion of net revenues generated by the higher margin fragrance brands.

In fiscal 2024, operating income for Prestige was $580.7 compared to income of $483.7 in fiscal 2023.

Operating margin improved to 14.1% of net revenues in fiscal 2023 as compared to 11.2% in fiscal 2022, driven primarily by lower fixed costs as a percentage of net revenues (approximately 110 basis points) primarily due to lower depreciation expense related to fully depreciated technology equipment, lower cost of goods sold as a percentage of net revenues (approximately 60 basis points) and lower amortization expense as a percentage of net revenues (approximately 60 basis points) mainly due to the certain definite-lived intangible assets reaching the end of their useful lives.

Consumer Beauty

In fiscal 2025, operating loss for Consumer Beauty was $127.4 compared to income of $89.3 in fiscal 2024.

Operating margin worsened to (6.1)% of net revenues in fiscal 2025 as compared to 4.0% in fiscal 2024, primarily driven by asset impairment charges (approximately 820 basis points), higher costs of goods sold as a percentage of net revenues (approximately 100 basis points), an increase in other general expenses (approximately 80 basis points), and higher advertising and consumer promotion expense as a percentage of net revenues (approximately 40 basis points), partially offset by lower fixed costs as a percentage of net revenues (approximately 40 basis points) primarily related to decreased discretionary compensation for employees offsetting increased administrative costs.

Our Consumer Beauty operating margin was negatively impacted by a greater proportion of net revenues generated by the lower margin brands in Brazil compared to the prior year.

In fiscal 2024, operating income for Consumer Beauty was $89.3 compared to income of $63.3 in fiscal 2023.

Operating margin improved to 4.0% of net revenues in fiscal 2024 as compared to 3.0% in fiscal 2023, primarily driven by lower advertising and consumer promotion expense as a percentage of net revenues (approximately 30 basis points) primarily due to lower spend in offline consumer engagement and lower transactional foreign exchange losses as a percentage of net revenues (approximately 30 basis points).

In fiscal 2023, operating income for Consumer Beauty was $63.3 compared to income of $9.5 in fiscal 2022.

Operating margin improved to 3.0% of net revenues in fiscal 2023 as compared to 0.5% in fiscal 2022, driven by lower advertising and consumer promotional costs as a percentage of net revenues (approximately 90 basis points) primarily due to lower depreciation expense on promotional fixtures as a result of fewer fixtures being installed during the COVID-19 pandemic, a decrease in impairment charges as a percentage of net revenues (approximately 150 basis points) related to the impairment of indefinite-lived intangibles recorded in the prior period, and lower fixed costs as a percentage of net revenues (approximately 130 basis points) primarily due to lower depreciation expense as a percentage of net revenues.

Corporate primarily includes expenses not directly relating to our operating activities.

These items are included in Corporate since we consider them to be corporate responsibilities, and these items are not used by our management to measure the underlying performance of the segments.

Operating loss for Corporate was $123.3, $3.3 and $135.8 in fiscal 2024, 2023 and 2022, respectively, as described under “Adjusted Operating Income” below.

The operating loss of $123.3 in fiscal 2024 declined in comparison to the prior year primarily due to the gain recognized due to the early termination of the Lacoste fragrance license in the prior period ($104.4) lower stock based compensation ($47.1 reduction in expense) primarily related to a reduction in expense recognized in connection with grants made to the CEO, partially offset by an increase in restructuring and business realignment costs ($42.9 increase in expense).

The operating loss of $3.3 in fiscal 2023 includes stock-based compensation ($135.9), partially offset by gains related to the early termination of the Lacoste fragrance license ($104.4), gains related to the market exit in Russia (approximately $17.0), and gains on sale of real estate ($4.9)

The operating loss of $135.8 in fiscal 2022 includes stock-based compensation ($195.5), costs related to the Russia market exit ($45.9), restructuring and other business realignment costs ($4.7), acquisition and divestiture related costs ($14.7), partially offset by a gains on the sale of real estate ($115.5) and gains from sale of brand assets ($9.5).

Continuing Operations by Segment

We believe that adjusted operating income (loss) from continuing operations by segment further enhances an investor’s understanding of our performance.

Operating loss for Corporate was $212.1, $123.3 and $3.3 in fiscal 2025, 2024 and 2023, respectively, as described under “Adjusted Operating Income (Loss) by Segment” below.

The operating loss of $212.1 in fiscal 2025 increased in comparison to the prior year primarily driven by the loss on the termination of the KKW Collaboration Agreement of $71.0, $55.2 related to an increase in restructuring and business realignment costs in the current period, partially offset by a decrease of $38.8 in stock compensation expense in the current period.

The operating loss of $123.3 in fiscal 2024 primarily includes stock based compensation of $88.8 and restructuring and business realignment costs of $36.6.

The operating loss of $3.3 in fiscal 2023 includes stock-based compensation of $135.9, partially offset by gains related to the early termination of the Lacoste fragrance license of $104.4, gains related to the market exit in Russia of approximately $17.0, and gains on sale of real estate of $4.9.

Adjusted Operating Income (Loss) by Segment

We believe that adjusted operating income (loss) by segment further enhances an investor’s understanding of our performance.

See “Overview—Non-GAAP Financial Measures.” A reconciliation of reported operating income (loss) to Adjusted operating income is presented below, by segment:

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(GAAP) Adjustments (a)

Adjusted operating income (loss) from continuing operations

Adjusted operating income (loss)

Prestige $ 580.6 $ 192.6 $ 773.2

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Adjustments (a)

Adjusted operating income (loss) from continuing operations

Adjusted operating income (loss)

Prestige $ 580.7 $ 153.7 $ 734.4

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Adjustments (a)

Adjusted operating income (loss) from continuing operations

Adjusted operating income (loss)

Prestige $ 483.7 $ 151.4 $ 635.1

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(in millions) 2025 2024 2023 2025/2024 2024/2023

Net income $ 109.4 $ 523.2 $ 262.0 (79 %) 100 %

Net income margin 1.8 % 9.4 % 4.9 %

Provision (benefit) for income taxes $ 95.1 $ 181.6 $ 164.8 (48 %) 10 %

Income before income taxes $ 204.5 $ 704.8 $ 426.8 (71 %) 65 %

Net (loss) income $ (350.2) $ 109.4 $ 523.2 <(100%) (79 %)

Net (loss) income margin (5.9) % 1.8 % 9.4 %

Provision for income taxes $ 5.4 $ 95.1 $ 181.6 (94 %) (48 %)

(Loss) Income before income taxes $ (344.8) $ 204.5 $ 704.8 <(100%) (71 %)

Interest expense, net $ 214.2 $ 252.0 $ 257.9 (15 %) (2 %)

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Reported operating income $ 241.1 $ 546.7 $ 543.7 (56 %) 1 %

% of Net revenues 8.9 % 9.8 % 4.5 %

Reported operating income margin 4.1 % 8.9 % 9.8 %

Amortization expense 186.9 193.4 191.8 (3 %) 1 %

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Stock-based compensation 50.0 88.8 135.9 (44 %) (35 %)

Costs related to acquisition and divestiture activities — — 14.7 N/A (100 %)

Asset impairment charges — — 31.4 N/A (100 %)

Early license termination/brand asset sale and market exit costs (0.5) (121.4) 36.4 100 % <(100%)

Asset impairment charges 212.8 — — N/A N/A

Early license termination and market exit costs 70.3 (0.5) (121.4) >100% 100 %

Gains on sale of real estate — (1.6) (4.9) 100 % 67 %

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Adjusted operating income $ 852.9 $ 863.4 $ 738.8 (1 %) 17 %

% of Net revenues 14.1 % 13.3 % 11.6 %

Adjusted operating income margin 14.5 % 14.1 % 13.3 %

Adjusted depreciation 228.8 227.7 234.0 — % (3) %

Adjusted EBITDA $ 1,081.7 $ 1,091.1 $ 972.8 (1 %) 12 %

% of Revenues 17.8 % 17.5 % 17.1 % 1.7 % 2.3 %

Adjusted EBITDA margin 18.4 % 17.8 % 17.5 %

In fiscal 2025, adjusted operating income was $852.9 compared to income of $863.4 in fiscal 2024.

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Amortization expense 149.7 153.7 151.4 (3) % 2 %

Asset impairment charges 42.9 — — N/A N/A

Total adjustments to reported operating income $ 192.6 $ 153.7 $ 151.4 25 % 2 %

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(in millions) 2025 2024 2023 2025/2024 2024/2023

Reported operating income $ 89.3 $ 63.3 $ 9.5 41 % >100%

Reported operating income margin 4.0 % 3.0 % 0.5 %

Reported operating (loss) income $ (127.4) $ 89.3 $ 63.3 <(100%) 41 %

Reported operating (loss) income margin (6.1) % 4.0 % 3.0 %

Amortization expense 37.2 39.7 40.4 (6) % (2) %

Asset impairment charges — — 31.4 N/A (100) %

Asset impairment charges 169.9 — — N/A N/A

Total adjustments to reported operating income $ 207.1 $ 39.7 $ 40.4 >100% (2) %

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Stock-based compensation 50.0 88.8 135.9 (44) % (35) %

Costs related to acquisition and divestiture activities $ — $ — $ 14.7 N/A (100) %

Early license termination/brand asset sale and market exit costs $ (0.5) $ (121.4) $ 36.4 100 % <(100%)

Early license termination and market exit costs 70.3 (0.5) (121.4) >100% 100 %

Gains on sale of real estate — (1.6) (4.9) 100 % 67 %

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Amortization Expense

In fiscal 2024, amortization expense increased to $193.4 from $191.8 in fiscal 2023.

In fiscal 2025, amortization expense decreased to $186.9 from $193.4 in fiscal 2024.

The decrease was primarily driven by certain license and collaboration agreements, which fully amortized in early fiscal 2023 and fiscal 2022.

In fiscal 2024, amortization expense increased to $193.4 from $191.8 in fiscal 2023.

Restructuring and Other Business Realignment Costs

We incurred $521.3 of cash costs life-to-date related to our previously announced and substantially completed Transformation Plan as of June 30, 2024, which have been recorded in Corporate.

In addition, we continue to analyze our cost structure and evaluate opportunities to streamline operations through a range of other cost reduction activities (“Current Restructuring Actions”).

We incurred approximately $5.0 of cash costs life-to-date as of June 30, 2025, which have been recorded in Corporate.

In fiscal 2025, we incurred restructuring and other business structure realignment costs of $91.8, as follows:

• We incurred restructuring costs of $36.7, primarily related to the Current Restructuring Actions, included in the Consolidated Statements of Operations and

• We incurred restructuring costs of $76.7, of which $75.0 related to the Fixed Cost Reduction Plan, included in the Consolidated Statement of Operations;

• We incurred business structure realignment costs of $15.1 which are reported in selling, general and administrative expenses and cost of sales, primarily related to the Fixed Cost Reduction Plan.

In fiscal 2024, we incurred a credit in restructuring and other business structure realignment costs of $36.6, as follows:

• We incurred restructuring costs of $36.7 primarily related to the Restructuring Actions, included in the Consolidated Statements of Operations and

• We incurred a credit in business structure realignment costs of $(0.1) which is reported in selling, general and administrative expenses.

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This amount includes $0.9 reported in cost of sales in the Consolidated Statement of Operations, and a credit of $(0.7) reported in selling, general and administrative expenses.

In fiscal 2022, we incurred restructuring and other business structure realignment costs of $4.7, as follows:

• We incurred a credit in restructuring costs of $(6.5) primarily related to the Transformation Plan, included in the Consolidated Statements of Operations.

Included within the credit in restructuring costs is $(6.3) related to employee severances in connection with our exit of Russia;

• We incurred business structure realignment costs of $11.2 primarily related to our Transformation Plan and certain other programs.

This amount includes $11.6 reported in cost of sales due to an increase in accelerated depreciation as part of Transformation Plan, and a credit of $(0.4) reported included in selling, general and administrative expenses in the Consolidated Statement of Operations.

In all reported periods, all restructuring and other business realignment costs were reported in Corporate.

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In fiscal 2024, stock-based compensation was $88.8 as compared with $135.9 in fiscal 2023.

The decrease in stock-based compensation is primarily related to a reduction in expense recognized in connection with a prior year's grant made to the CEO.

The decrease in stock-based compensation is primarily related to a reduction in expense recognized in connection with awards granted to the CEO.

In all reported periods, all costs related to stock-based compensation were reported in Corporate.

Acquisition- and divestiture-related costs

In fiscal 2024 and 2023, we incurred no costs related to acquisition- and divestiture-activities.

In fiscal 2022, we incurred $14.7 of acquisition- and divestiture-related costs which were associated with the Wella Transaction.

In all reported periods, all acquisition- and divestiture-related costs were reported in Corporate, except where otherwise noted.

Asset Impairment Charges

In fiscal 2025, we incurred $212.8 of asset impairment charges of which $84.0, $61.0, and $24.9 related to the Max Factor , CoverGirl and Bourjois trademarks, respectively, totaling $169.9 within the Consumer Beauty segment and $42.9 related to the Philosophy trademark within the Prestige Segment.

In fiscal 2024 and 2023, we did not incur any asset impairment charges.

In fiscal 2022, we incurred $31.4 of asset impairment charges related to the impairment of indefinite-lived intangibles in connection with our decision to exit Russia, all of which was reported in Consumer Beauty.

For further detail as to the factors resulting in the asset impairment charges, see Note 9 —Goodwill and Other Intangible Assets, net to the Consolidated Financial Statements.

Early License Termination/Brand Asset Sale and Market Exit Costs

Early License Termination and Market Exit Costs

In fiscal 2025, we incurred a net loss of $71.0 related to the loss on the termination of the KKW Collaboration Agreement and recognized a gain of $(0.7) related to our decision to wind down our business in Russia.

In fiscal 2024, we recognized a gain of $(0.5) related to the early termination of a license and our decision to wind down our business in Russia.

In fiscal 2023, we recognized gains of $(121.4) related to the early termination of a license and our decision to wind down our business in Russia.

In fiscal 2022, we incurred costs of $36.4 related to our decision to wind down our business operations in Russia and the sale of brand assets.

In fiscal 2023, we recognized gains of $(121.4) related to the early termination of a license and our decision to wind down our business operations in Russia.

Gains on Sale of Real Estate

In fiscal 2024, we recognized gains of $1.6 related to sale of real estate, which was reported in Corporate.

In fiscal 2025, we recognized no gains related to sale of real estate.

In fiscal 2024, we recognized gains of $1.6 related to sale of real estate, which was reported in Corporate.

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Net interest expense was $214.2, $252.0, and $257.9 in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.

In fiscal year 2024, the decrease in interest expense is primarily due to lower debt balances in the current period despite higher interest rates.

In fiscal year 2023, the increase in interest expense is primarily due to the impact of a higher average interest rate despite lower debt balances compared to the previous year.

In fiscal year 2025, the decrease in interest expense is primarily due to lower average debt balances in the current period, lower average interest rates primarily reflecting positive impact from cross-currency swaps in reducing interest expense, as well as due to lower losses on foreign exchange forward contracts on the Euro as compared to the prior year.

In fiscal year 2024, the decrease in interest expense is primarily due to lower debt balances compared to fiscal 2023 despite higher interest rates.

OTHER EXPENSE (INCOME), NET

In fiscal 2025, net other expense was $371.7, was principally comprised of net losses on forward repurchase contracts of $291.7, and unfavorable fair market value adjustment related to our equity investment in Wella of $83.0.

In fiscal 2024, net other expense was $90.2, was principally comprised of net losses on forward repurchase contracts of $124.2, partially offset by a favorable adjustment for the unrealized gain in the Wella investment of $25.0.

In fiscal 2023, net other income was $419.0, primarily related to a favorable adjustment for the unrealized gain in the Wella investment of $230.0 and unrealized gain on forward repurchase contracts of $196.9 partially offset by associated fees of $28.2.

In fiscal 2022, net other income was $409.9, primarily related to a favorable adjustment for the unrealized gain in the Wella investment of $403.9.

The following table presents our (benefit) provision for income taxes, and effective tax rates for the periods presented:

2025 2024 2023

Provision (benefit) for income taxes $ 95.1 $ 181.6 $ 164.8

Provision for income taxes $ 5.4 $ 95.1 $ 181.6

Effective income tax rate (1.6) % 46.5 % 25.8 %

The 20.7% increase in the effective tax rate in fiscal 2024 from fiscal 2023 was primarily driven by the following items:

• a 17.6% increase from an increase in valuation allowances recorded primarily on interest expense carryforwards;

• a 13.5% increase due to changes to the net deferred taxes recognized on the assignment of strategic service functions from Amsterdam to Geneva, as an indirect result of the required revaluation of the original transfer of the main principal location from Geneva to Amsterdam in fiscal 2021;

• an 11.8% increase from the revaluation of our deferred tax liabilities due to a tax rate increase enacted in Switzerland;

• an 11.7% increase in the foreign tax rate differential impact primarily due to lower fair value gains related to the investment in the Wella business taxed at a lower rate as compared to our U.S.

The (1.6)% effective tax rate in fiscal 2025 results from reporting losses before income taxes and a provision for income taxes.

The unfavorable impacts to the rate were primarily driven by the following items:

• a 28.4% unfavorable impact to the effective tax rate due to an increase in valuation allowances recorded on interest expense carryforwards and the capital loss realized as a result of the sale of its investment in KKW Holdings during the period, compared with a 19.0% unfavorable impact in the prior period;

• a 9.9% unfavorable impact to the effective tax rate due to changes in unrecognized tax benefits primarily related to new reserves for benefits realized as a result of a tax recovery benefit in Brazil, compared to a favorable impact of 7.6% in the prior period;

• a 12.7% unfavorable impact to the effective tax rate as a result of various permanent differences including US foreign income inclusions.

These unfavorable rate drivers were partially offset by the following favorable rate drivers:

• a 22.8% favorable impact to the effective tax rate due to benefits realized as a result of a tax recovery benefit in Brazil (a majority of which are offset by the unrecognized tax benefit impact described above);

• a 9.0% favorable impact due to a tax deductible impairment in Switzerland on its investment in subsidiaries.

The 46.5% effective tax rate in fiscal 2024 results from reporting income before taxes and a provision for income taxes.

The unfavorable impacts to the rate were primarily driven by the following items:

• a 19.0% unfavorable impact from an increase in valuation allowances recorded primarily on interest expense carryforwards;

• a 13.5% unfavorable impact due to changes to the net deferred taxes recognized on the assignment of strategic service functions from Amsterdam to Geneva, as an indirect result of the required revaluation of the original transfer of the main principal location from Geneva to Amsterdam in fiscal 2021;

• an 11.8% unfavorable impact from the revaluation of our deferred tax liabilities due to a tax rate increase enacted in Switzerland;

• a 10.2% unfavorable impact in the foreign tax rate differential impact primarily due to fair value gains related to the investment in the Wella business taxed at a lower rate as compared to our U.S.

Federal statutory rate of 21%.

These increases were partially offset by the following decreases:

• an 18.5% decrease as a result of the issuance of non-refundable income tax credits received from the Swiss Tax Authorities of $97.1.

These unfavorable rate drivers were partially offset by the following favorable rate drivers:

• an 18.5% favorable impact as a result of the issuance of non-refundable income tax credits received from the Swiss Tax Authorities of $97.1.

The Company recorded a benefit for the tax credit of $37.8, net of a valuation allowance;

• a 12.2% decrease from a reduction of foreign tax audits due to the settlement of foreign tax audits.

The 12.8% decrease in the effective tax rate in fiscal 2023 from fiscal 2022 was primarily driven by the following items:

• a 6.6% decrease in tax costs associated with the Company’s exit from Russia in the prior year;

• a 6.6% decrease from a reduction in permanent differences related to non-deductible expenses and non-deductible foreign exchange losses;

• a 4.8% decrease as a result of the reduction in the amount of non-deductible executive stock compensation;

• a 3.0% decrease from a gain on the disposition of business assets (real estate) in the prior period;

• a 1.9% decrease from a foreign exchange loss recognized on the repatriation of funds in the current year that were previously taxed.

These decreases were partially offset by the following increases:

• a 7.1% increase in unrecognized tax benefits due to the impact of increasing U.S.

taxation of foreign sourced income;

• a 2.4% increase in foreign tax rate differential impact primarily due to lower fair value gains related to the investment in the Wella business taxed at a lower rate as compared to our U.S.

Federal statutory rate of 21%.

• a 7.6% favorable impact from a reduction of foreign tax audits due to the settlement of foreign tax audits.

The Company has significant income in jurisdictions such as Germany, Netherlands, France, and Spain which have statutory tax rates higher than the U.S.

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Our effective tax rate could fluctuate significantly and could be adversely affected to the extent earnings are lower than anticipated in countries that have lower statutory rates and higher than anticipated in countries that have higher statutory rates.

Reconciliation of Reported Income (Loss) Before Income Taxes to Adjusted Income (Loss) Before Income Taxes and Effective Tax Rates from Continuing Operations:

Reconciliation of Reported Income (Loss) Before Income Taxes to Adjusted Income (Loss) Before Income Taxes and Effective Tax Rates:

Year Ended June 30, 2025 Year Ended June 30, 2024 Year Ended June 30, 2023

(in millions) (Loss)/ income before income taxes (Benefit) provision for income taxes Effective tax rate (Loss)/ income before income taxes (Benefit) provision for income taxes Effective tax rate (Loss)/income before income taxes (Benefit)provision for income taxes Effective tax rate

Reported income before income taxes $ 204.5 $ 95.1 46.5 % $ 704.8 $ 181.6 25.8 % $ 426.8 $ 164.8 38.6 %

(in millions) (Loss)/ income before income taxes Provision for income taxes Effective tax rate (Loss)/ income before income taxes Provision for income taxes Effective tax rate (Loss)/ income before income taxes Provision for income taxes Effective tax rate

Reported (loss) income before income taxes $ (344.8) $ 5.4 (1.6) % $ 204.5 $ 95.1 46.5 % $ 704.8 $ 181.6 25.8 %

Adjustments to reported operating income (loss) (a)

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(c) In fiscal 2024, the total tax impact on adjustments includes a tax expense of $27.6 due to changes to the net deferred taxes recognized on the assignment of strategic service functions from Amsterdam to Geneva, as an indirect result of the required revaluation of the original transfer of the main principal location from Geneva to Amsterdam in fiscal 2021.

The total tax impact on adjustments also includes a tax benefit of $1.1, $0.4 and tax expense of $24.1 for fiscal 2024, fiscal 2023 and fiscal 2022, respectively, recorded as the result of the Company’s exit from Russia.

(d) The amount represents the realized and unrealized (gain) loss recognized for the change in fair value of the investment in Wella.

The total tax impact on adjustments also includes a tax benefit of $10.0, $1.1, and $0.4 for fiscal 2025, fiscal 2024, and fiscal 2023, respectively, recorded as the result of the Company’s exit from Russia.

(d) The amount represents the unrealized (gain) loss recognized for the change in fair value of the investment in Wella.

(e) See “Reconciliation of Reported Net Income (Loss) Attributable to Coty Inc.

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The adjusted effective tax rate was 35.1% compared to 26.5% in the prior-year period.

The differences were primarily due to an increase in valuation allowances recorded primarily on interest expense carryforwards and the tax impact of the revaluation of the Company’s deferred tax liabilities due to a tax rate increase enacted in Switzerland offset by a tax benefit recorded as a result of the issuance of non-refundable income tax credits received from the Swiss Tax Authorities and a reduction of unrecognized tax benefits due to the settlement of foreign tax audits.

The differences were primarily due to an increase in valuation allowances recorded on interest expense carryforwards in the current period.

Cash paid during the years ended June 30, 2025, 2024 and 2023, for income taxes was $95.4, $172.6 and $58.6, respectively.

NET INCOME (LOSS) ATTRIBUTABLE TO COTY INC.

In fiscal 2024, net income attributable to Coty Inc.

In fiscal 2025, net loss attributable to Coty Inc.

was $367.9 compared to income of $89.4 in fiscal 2024.

The net income increase was primarily driven by losses from forward repurchase contracts of $124.2 compared to gains of $168.7 in the prior year and a lower favorable adjustment of $205.0 related to the unrealized gain in the Wella investment in the current year.

The increase in net loss was primarily driven by asset impairment charges of $212.8, higher net losses on forward repurchase contracts of $167.5, lower gross profit of $118.3, higher losses from equity investments of $108.0 as a result of unfavorable fair value market adjustment in the current period compared to favorable adjustments in the prior year period, and higher restructuring costs of $40.0, partially offset by a lower provision for income taxes of $89.7 in the current period, lower selling, general and administrative expenses of $59.0, and lower interest expense of $37.8.

In fiscal 2024, net income attributable to Coty Inc.

was $89.4 compared to income of $508.2 in fiscal 2023.

The net income increase was primarily driven by higher operating income in the current year, a favorable adjustment of $230.0 related to the realized and unrealized gain in the Wella investment in the current year, and the loss on sale of the Wella Business, which was recorded in the comparative period, partially offset by a provision for income taxes in the current year compared to income tax benefit in the prior year.

ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO COTY INC.

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(in millions) 2025 2024 2023 2025/2024 2024/2023

Net income (loss) from Coty Inc.

Net (loss) income from Coty Inc.

net of noncontrolling interests $ (367.9) $ 89.4 $ 508.2 <(100%) (82 %)

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(13.2) (13.2) (13.2) — % — %

Reported net income (loss) attributable to Coty Inc.

Reported net (loss) income attributable to Coty Inc.

(381.1) 76.2 495.0 <(100%) (85 %)

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611.8 316.7 195.1 93 % 62 %

Adjustments to Loss on Sale of Business — — (6.1) N/A 100 %

Change in fair value of investment in Wella Business (c)

Change in fair value of investment in Wella Company (c)

83.0 (25.0) (230.0) >100% 89 %

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(117.4) (35.6) 4.5 <(100%) <(100%)

Adjustment for deemed Series B Preferred Stock dividends related to the First and Second Exchanges — — 160.0 N/A (100 %)

Adjusted net income attributable to Coty Inc.

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The treasury method typically does not adjust the net income attributable to Coty Inc., while the if-converted method requires an adjustment to reverse the impact of the preferred stock dividends and the impact of fair market value (gains)/losses for contracts with the option to settle in shares or cash, if dilutive, on net income applicable to common stockholders during the period.

(b) See a description of adjustments under “Adjusted Operating Income (Loss) from Continuing Operations for Coty Inc.”

(b) See a description of adjustments under “Adjusted Operating Income (Loss) for Coty Inc.”

(c) In fiscal 2025, 2024, and 2023, the amount represents the unrealized (gain) loss recognized for the change in fair value of the investment in Wella.

(d) In fiscal 2024, the amount includes recovery of previously written-off non-income tax credits and the amortization of basis differences in certain equity method investments.

(d) In fiscal 2025, the amount includes recovery of previously written-off non-income tax credits, the amortization of basis differences in certain equity method investments, and net loss on the sale of an equity investment.

In fiscal 2024, the amount includes recovery of previously written-off non-income tax credits and the amortization of basis differences in certain equity method investments.

In fiscal 2023, the amount includes the amortization of basis differences in certain equity method investments and pension curtailment gains.

In fiscal 2022, the amount includes a net gain on the exchange of Series B Preferred Stock partially offset by the amortization of basis differences in certain equity method investments and pension curtailment losses.

(e) The amounts represent the after-tax impact of the non-GAAP adjustments included in Net (loss) income attributable to noncontrolling interests based on the relevant noncontrolling interest percentage in the Consolidated Statements of Operations.

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Condensed Consolidated Statements of Operations Data:

Fiscal 2024 Fiscal 2023

Three Months Ended Three Months Ended

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Restructuring costs (2.0) 76.6 1.4 0.7 1.7 0.9 5.7 28.4

Asset impairment charges — 212.8 — — — — — —

Operating income (loss) 15.5 (280.4) 268.2 237.8 34.7 77.8 236.7 197.5

Interest expense, net 50.1 47.9 54.4 61.8 61.7 60.4 60.1 69.8

Income (Loss) from continuing operations before income taxes (107.4) 3.4 257.4 51.1 78.8 141.6 280.2 204.2

Provision (benefit) for income taxes (11.8) (5.4) 71.4 40.9 43.3 29.8 38.8 69.7

Net (loss) income from continuing operations (95.6) 8.8 186.0 10.2 35.5 111.8 241.4 134.5

(Loss) income before income taxes (73.5) (460.6) 56.6 132.7 (107.4) 3.4 257.4 51.1

(Benefit) provision for income taxes (4.2) (58.4) 26.0 42.0 (11.8) (5.4) 71.4 40.9

Net (loss) income (69.3) (402.2) 30.6 90.7 (95.6) 8.8 186.0 10.2

Net (loss) income attributable to noncontrolling interests (0.4) 2.0 1.6 2.1 1.3 2.4 0.5 1.1

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Convertible Series B Preferred Stock dividends (3.3) (3.3) (3.3) (3.3) (3.3) (3.3) (3.3) (3.3)

Net (loss) income from continuing operations attributable to common stockholders (100.2) 0.5 177.6 (1.7) 29.6 105.1 235.0 125.3

Net (loss) income attributable to common stockholders (72.1) (409.0) 20.4 79.6 (100.2) 0.5 177.6 (1.7)

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$ (0.08) $ (0.47) $ 0.02 $ 0.09 $ (0.12) $ — $ 0.20 $ —

(a) The outstanding stock options and Series A Preferred Stock with purchase or conversion rights to purchase shares of Common Stock, RSUs and Convertible Series B Preferred Stock were excluded in the computation of diluted shares when their effect would be antidilutive.

(a) The outstanding stock options and Series A Preferred Stock with purchase or conversion rights to purchase shares of Common Stock, RSUs, Convertible Series B Preferred Stock, and Forward Repurchase Contracts were excluded in the computation of diluted shares when their effect would be antidilutive.

FINANCIAL CONDITION

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Our principal uses of cash are to fund planned operating expenditures, capital expenditures, interest payments, dividends, share repurchases, any principal payments on debt, and from time to time, acquisitions, and business structure realignment expenditures.

Working capital movements are influenced by the sourcing of materials related to the production of products.

Working capital movements are influenced by the sourcing of materials related to the manufacturing of products.

Cash and working capital management initiatives, including the phasing of vendor and tax payments and factoring of trade receivables from time-to-time, may also impact the timing and amount of our operating cash flows.

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We continue to take steps to permanently reduce our debt, in order to reduce interest costs and improve our long term profitability and cash flows.

In addition, our 25.84% investment in Wella gives us the opportunity for further permanent debt reductions, when our equity position is fully or partially divested.

The timing of any future divestiture of our Wella stake will depend on a combination of factors including market conditions and the decisions of KKR, the majority owner of Wella.

Our 25.84% investment in Wella gives us the opportunity for further permanent debt reductions when our equity position is divested.

We have substantially completed the exit of our commercial activities in Russia.

However, we anticipate that the process related to the liquidation of the Russian legal entity will take an extended period of time.

We anticipate that we will incur future net cash costs of $10.0 to $15.0, which will be funded by our Russian subsidiary.

We anticipate that we will incur an immaterial amount of additional costs through the completion of the wind down, and future net cash costs of $1.0 to $1.5, which will be funded by our Russian subsidiary.

The amount of future costs, including cash costs, will be subject to various factors, such as additional government regulation and the resolution of legal contingencies.

The impact of inflation on material, logistical and other costs subsided during fiscal year 2024, which was primarily driven by a significant easing during the second and third quarters.

Inflation may continue to impact certain costs, such as labor, however, we currently anticipate the overall impact of inflation to remain muted.

Additionally, through steps taken to improve order fill rates and mitigate the impact of supply chain constraints, we have seen improvements in our order fill rates on a company-wide basis.