Coty's second-quarter fiscal 2026 results indicate a strategic shift towards streamlined operations in Consumer Beauty, driven by portfolio optimization and innovative marketing approaches, although near-term sales hurdles are anticipated.

• Consumer Beauty is implementing a "Color the Future" performance improvement plan focused on key iconic brands to regain market share and sales growth.
• Initial sales performance shows improvement in declines from high single digits to low/mid-single digits for major brands.
• New strategy emphasizes smaller, streamlined product bundles, leading to less initial pipeline fill but expected to enhance long-term sell-out velocity.
• The company is leveraging AI to reduce asset creation costs by up to 80%, reallocating savings towards consumer-facing marketing.
• Profit recovery in Consumer Beauty is projected for fiscal 2027, driven by improved gross margins and enhanced sell-out rates.