Coty Faces Securities Class Action After Q2 2026 Earnings and CEO Departure

Coty Inc. (NYSE: COTY) is facing a securities class action lawsuit seeking to represent investors who purchased or otherwise acquired Coty common stock between November 5, 2025 and February 4, 2026.

The lawsuit was prompted by Coty’s February 5, 2026 Q2 2026 earnings report, which described serious operational issues, and by the abrupt departure of CEO Sue Y. Nabi. The news drove Coty shares down more than 8% on February 5, 2026.

Claims at the center of the lawsuit

According to the complaint, the case focuses on the propriety of Coty’s disclosures regarding business trends across its two segments—Prestige and Consumer Beauty.

In connection with its Q1 2026 results, Coty told investors on November 5, 2025 that it expected improvement in sales trends during fiscal 2026. The company also reaffirmed its fiscal 2026 adjusted EBITDA target of $1 billion, stating: “we remain laser focused on strengthening our profitability and balance sheet, with our fiscal year 2026 business trends steadily improving in line with our expectations.”

The complaint alleges Coty made false and misleading statements by not disclosing that the Consumer Beauty market was underperforming, that margins were compressed due to increased marketing investments, and that Prestige fragrance growth was slowing.

Key developments and disclosed financial deterioration

Investors began to learn additional information after Coty announced on December 12, 2025—without explanation—the departure of CEO Nabi, which the filing says contributed to a significant decline in Coty’s share price.

On February 5, 2026, Coty reported its Q2 2026 results. The company disclosed that Consumer Beauty operating income fell by more than 70% versus the prior year period. Prestige operating income also declined, falling by more than 18% year over year. Coty also withdrew its fiscal 2026 guidance for adjusted EBITDA and free cash flow.

During that day’s earnings call, management said for Q3 it expected like-for-like revenue trends to decline mid-single digits, driven primarily by larger declines in Consumer Beauty. Management also said it estimated that headwinds from retailer destocking significantly reduced in the quarter, while the promotional environment intensified through the holiday period and remained elevated, which it described as a headwind to net sales and, in turn, gross margin.

Following the February 5, 2026 disclosures, Coty shares fell more than 8%.

Investigation and lead plaintiff timeline

Hagens Berman, a national shareholders rights firm, said it is investigating whether Coty intentionally misled investors about segment business trends and whether the year-over-year softness might be related to earlier reported destocking issues. The firm also said it is looking into the circumstances surrounding Nabi’s abrupt and unexplained departure.

The firm’s statement included comments from Reed Kathrein, the Hagens Berman partner leading the investigation.

• Class Period: Nov. 5, 2025 – Feb. 4, 2026
• Lead Plaintiff Deadline: May 22, 2026

Whistleblower and contact information

Hagens Berman urged investors who suffered significant losses to submit their claims and encouraged witnesses with non-public information to contact the firm. The firm also referenced the SEC Whistleblower program, stating that whistleblowers who provide original information may receive rewards totaling up to 30% of any successful SEC recovery.

Contact details provided by the firm: COTY@hbsslaw.com and 844-916-0895.