Coty Inc. faces a securities class action lawsuit that seeks to represent investors who purchased or otherwise acquired Coty common stock between November 5, 2025, and February 4, 2026.

The lawsuit is focused on the propriety of Coty’s disclosures about business trends within its Prestige and Consumer Beauty segments.

On November 5, 2025, in connection with the company’s Q1 2026 financial results, Coty assured investors that it expected improvement in sales trends over the course of fiscal 2026. 

Then CEO Sue Y. Nabbi assured investors that: “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 company reaffirmed its FY 2026 adjusted EBITDA target of $1 billion.

The complaint claims that Coty made false and misleading statements while failing to disclose that the Consumer Beauty market was underperforming, margins were compressed by increased marketing investments, and Prestige fragrance growth was slowing.

On February 5, 2026, Coty then announced its Q2 2026 financial results, revealing that Consumer Beauty’s operating income had plummeted over 70% from the year-earlier period. 

Additionally, Prestige’s operating income fell by over 18% from the year-earlier period. Coty also withdrew its FY 2026 EBITDA and free cash flow guidance.

Management said during the earnings call that day, 

“[f]or Q3, we expect like-for-like revenue trends to decline mid-single digits, driven primarily by bigger declines in Consumer Beauty[…]” and revealed “we estimate that the headwinds from retailer destocking significantly reduced in the quarter, the promotional environment intensified as we moved through the holiday period and remains elevated, which is a headwind to net sales and, by extension gross margin.”

This news drove the price of Coty shares down over 8% that day.

The developments have prompted national shareholders’ rights firm Hagens Berman to investigate claims that Coty violated the federal securities laws.

Reed Kathrein, the Hagens Berman partner leading the investigation, said,

“We’re investigating whether Coty may have intentionally misled investors about its segment business trends and, if so, whether the year-over-year softness might be related to earlier reported destocking issues. We’re also looking at the circumstances surrounding Ms. Nabi’s abrupt and unexplained departure.”

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