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The drastic drop in **Income Before Income Taxes**—from **$141.6 million** in Q3 2023 to **$3.4 million** in Q3 2024—resulted from several factors. First, the swing in **Other Income, Net** was significant, moving from a loss of **$156.9 million** in Q3 2023 to a positive **$14.0 million** in Q3 2024. Second, **Interest Expense** increased modestly from **$58.8 million** to **$60.4 million** (a 3% rise). Finally, even though **Operating Income** increased by 79% (from **$43.5 million** to **$77.8 million**), these factors combined contributed to the overall decline of about **98%** in income before income taxes in Q3 2024.  **[0001024305-24-000021_exhibit991-earningsrelease.htm:30]** **[0001024305-24-000021_exhibit991-earningsrelease.htm:28]** **[0001024305-24-000023_coty-20240331.htm:61]** 

Why did Income Before Income Taxes drop so drastically in Q3 2024?

The swing to a negative **Income Before Income Taxes** in Q4 2024 is primarily attributed to three factors: **significantly higher Other Expense (Income), Net**, which swung from a **$(22.0) million gain** in Q4 2023 to an **$80.4 million expense** in Q4 2024; **lower Operating Income** driven by a marked reduction from **$129.0 million** in Q4 2023 to **$34.7 million** in Q4 2024, largely due to increased **Selling, General, and Administrative (SG&A) expenses**; and the contribution of **consistent Interest Expense**, which, although relatively stable, added to the overall decline.  **[0001024305-24-000034_exhibit991-earningsrelease.htm:28]** 

What caused the swing to a negative Income Before Income Taxes in Q4 2024?

Coty’s **net income** in Q3 2024 is so low because the company did not benefit from the **$173.7 million gain** on forward repurchase contracts that drove much of the higher net income in Q3 2023, and it also experienced **mark-to-market losses** on these contracts in Q3 2024. These factors, despite higher operating income, led to a significant decline in net income in Q3 2024 compared to previous periods.  **[0001024305-24-000023_coty-20240331.htm:65]** **[0001024305-24-000021_exhibit991-earningsrelease.htm:2]** 

Why is Net Income so low in Q3 2024 compared to previous periods?

In **Q4 2024**, EPS turned negative primarily due to a **sharp decline in net income** (reported at **$(100.2) million**), a **significant increase in the effective tax rate** to **46.5%**—up from **25.8%** in fiscal 2023—and a **73% drop in operating income** year-over-year. In addition, the impact of an **equity swap**, which excluded certain benefits that would have otherwise bolstered earnings, also played a role.  **[0001024305-24-000034_exhibit991-earningsrelease.htm:8]** **[0001024305-24-000035_coty-20240630.htm:186]** **[COTY_3399781_1]** 

What drove the EPS to turn negative in Q4 2024?

The documents show that overall net income fell from **$186.0 million** in Q1 2024 to **$30.6 million** in Q1 2025.  **[0001024305-24-000007_coty-20231231.htm:1]** **[0001024305-25-000007_coty-20241231.htm:1]**  However, the only explanations provided relate to a different measure—**net income attributable to Coty Inc.**—which actually improved in Q1 2025 due to **higher operating income** and **lower net losses from forward repurchase contracts**.  **[0001024305-24-000070_exhibit991-earningsrelease.htm:2]** **[0001024305-24-000071_coty-20240930.htm:56]**  No details are provided in the documents that explain why the overall net income declined sharply.

Why did Net Income fall sharply in Q1 2025 compared to Q1 2024?

f88d0d1563be17d43a145a352fa0c0483a54ccdfdf3f8491eed09a6d7ea707d4

The drastic decline in short-term debt in Q3 2024 was driven primarily by a refinancing of existing credit facilities, where Coty replaced older facilities with the 2023 Coty Revolving Credit Facility, thereby extending debt maturities and reducing near-term obligations. Additionally, the company executed cash tender offers on its 2026 Dollar Notes and 2026 Dollar Senior Secured Notes, which significantly reduced its outstanding debt obligations.  **[0001024305-24-000023_coty-20240331.htm:18]** **[0001024305-24-000007_coty-20231231.htm:15]** 

What drove the drastic decline in short-term debt in Q3 2024?

Coty’s cash and cash equivalents rose in Q4 2024 mainly due to a substantial boost in operating cash flow and a reduction in restricted cash. The company generated **$614.6 million** from operating activities during FY 2024, which significantly bolstered its cash position. Additionally, the decline in restricted cash—from **$36.9 million** in 2023 to **$19.8 million** in 2024—helped free up more liquidity for general use, despite the impact of capital expenditures and cash outflows from financing and investing activities.  **[0001024305-24-000035_coty-20240630.htm:152]** **[0001024305-24-000034_exhibit991-earningsrelease.htm:40]** 

Why did cash and cash equivalents rise in Q4 2024?

The drop in long-term debt was primarily driven by **debt redemptions and refinancing actions**. Specifically, Coty completed cash tender offers that resulted in the redemption of **$150.0 million of the 2026 Dollar Notes** and **$250.0 million of the 2026 Dollar Senior Secured Notes**. Additionally, the company executed a **refinancing amendment** to its 2018 Coty Credit Agreement, which replaced existing revolving credit commitments with new tranches maturing in July 2028, along with the issuance of new notes. These strategic financial moves contributed to the overall reduction in long-term debt in Q3 2024.  **[0001024305-24-000023_coty-20240331.htm:18]** 

What factors contributed to the drop in long-term debt in Q3 2024?

In FY 2024, Coty's total liabilities decreased from **$8,428.3 million** to **$7,834.8 million** due to several factors. The reduction was primarily driven by a lower long-term debt, which decreased from **$4,178.2 million** to **$3,841.8 million**. In addition, there was a decrease in current liabilities, notably with the short-term debt and current portion of long-term debt dropping from **$57.9 million** to **$3.0 million** and income and other taxes payable reducing from **$126.6 million** to **$68.1 million**. Furthermore, other noncurrent liabilities were reduced from **$1,265.8 million** to **$1,172.5 million**. These collective improvements contributed to the overall decrease in total liabilities.  **[0001024305-24-000034_exhibit991-earningsrelease.htm:40]** **[0001024305-24-000035_coty-20240630.htm:152]** 

How did total liabilities decrease in FY 2024?

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70556275ad4710d4878fa4960a38fc789d2bbcde850f836852b31a58774cf6df

Net Revenues (USD, millions)

Cost of Sales (USD, millions)

Gross Profit (USD, millions)

Selling, General and Administrative Expenses (USD, millions)

Amortization Expense (USD, millions)

Restructuring Costs (USD, millions)

Operating Income (USD, millions)

Interest Expense, Net (USD, millions)

Other Expense (Income), Net (USD, millions)

Income Before Income Taxes (USD, millions)

Provision for Income Taxes (USD, millions)

Net Income (USD, millions)

Net Income Attributable to Noncontrolling Interests (USD, millions)

Net Income Attributable to Redeemable Noncontrolling Interests (USD, millions)

Net Income Attributable to Coty Inc. (USD, millions)

Convertible Series B Preferred Stock Dividends (USD, millions)

Net Income Attributable to Common Stockholders (USD, millions)

Earnings per Common Share - Basic (USD)

Earnings per Common Share - Diluted (USD)

Weighted-average Common Shares Outstanding - Basic (Millions)

Weighted-average Common Shares Outstanding - Diluted (Millions)

321d4dcf4c0590239aca2d75e3c5b9239396110e86e5150ab88223ce9075d340

Prestige

- Fragrance

- Cosmetics

Consumer Beauty

- Color Cosmetics

- Body Care & Other

- Skincare

Total Revenue

885431e9db82d878d8028ffeac23f97bae8b1ede01cd1bfa968b7bbbe4d80e66

Number of countries where Coty sells products (countries)

Price and mix impact on net revenues for total Coty (percentage)

Unit volume change for total Coty (percentage)

Price and mix impact on net revenues for Prestige segment (percentage)

Unit volume change for Prestige segment (percentage)

Price and mix impact on net revenues for Consumer Beauty segment (percentage)

Unit volume change for Consumer Beauty segment (percentage)

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1a5ddbb2bb5691594221beeb767afc21c5cb5b1d0ca5fb2582f8844d5a28e719

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3f4d71cdd5fb21e8915b941f4f2b888a64149b9375d881d20acb8f8a2c121b9e

United States

Brazil

Germany

China

Travel Retail

Americas

- United States

EMEA

Asia Pacific

Other

North America

Europe

ALMEA

d23d9257efe7e2521f8172781cd9ab57dc39745db1085a8f0a4cd9504c967c06

COTY (COTY)

Financials