Coty Inc. is facing a securities class action lawsuit after a sharp year over year deterioration in operating performance, the abrupt departure of CEO Sue Y. Nabi, and the withdrawal of its fiscal 2026 guidance rattled investors. The case, led by plaintiffs’ firm Hagens Berman, focuses on whether Coty misled the market about segment trends and its growth trajectory in the months leading up to a disappointing Q2 2026 earnings release.
What Triggered The Lawsuit
The proposed class action covers investors who bought Coty shares between November 5, 2025 and February 4, 2026, with a lead plaintiff deadline of May 22, 2026. On November 5, 2025, tied to its Q1 2026 results, Coty reaffirmed an adjusted EBITDA target of $1 billion for FY 2026.
Nabi said, “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 those assurances were misleading because Coty did not fully disclose that its Consumer Beauty segment was underperforming, that margins were being squeezed by higher marketing spend, and that growth in Prestige fragrance was slowing.
On December 12, 2025, the company announced Nabi’s departure without detailed explanation, a move that pushed the share price lower and raised fresh questions about strategy and execution.
The situation escalated on February 5, 2026, when Coty reported Q2 2026 results, like for like net revenue fell 3%, adjusted operating income declined 18% to 19%, and segment pressure was stark, Consumer Beauty’s operating income dropped more than 70% year on year, while Prestige operating income fell over 18%.
The company also withdrew its FY 2026 EBITDA and free cash flow guidance and warned that Q3 like for like revenue was expected to decline mid single digits, driven mainly by steeper declines in Consumer Beauty. This update sent Coty’s share price down more than 8% in a single day…
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