COTY (COTY) FY2026 10-K Risk Factors: 9 New, 2 Dropped

What the changes say

AI use expanded across marketing, planning, supply chain, customer engagement and other operations, adding legal, privacy, cybersecurity and reputational exposure.
Strategic review may lead to divestitures of mass color cosmetics and the Brazil business, while Coty prioritizes fragrance and deleveraging.
Supply-chain, geopolitical, transportation, sustainability and e-commerce risks receive more specific treatment, including China, the Middle East and packaging rules.
The Euronext Paris listing adds explicit liquidity, dual-listing cost and potential delisting considerations.

What changed since the prior 10-K

New

NewRisks related to our Business and Industry
the aforementioned risks could have a material adverse effect on our business, prospects, financial condition, results of operations, cash flows, as well as the trading price of our securities
Coty may lose competitiveness if it cannot protect its trademarks, patents and copyrights, including against AI-related infringement and weak emerging-market protections.
NewRisks Related to our Business Strategy and Organization
Potential divestitures, and any retained liabilities from such sold business, could negatively impact our business and financial results
Divesting or discontinuing mass color cosmetics, Brazil brands or other businesses could create restructuring costs, weaker brands, license terminations and retained liabilities.
NewRisks related to our Business Operations
A disruption in our manufacturing, distribution, logistics or other operations could adversely affect our business
Global manufacturing, distribution and logistics could be disrupted by labor issues, system failures, conflicts, disasters, regulatory problems or limited driver capacity.
NewRisks related to our Business Operations
Volatility in the cost or availability of raw materials, packaging, transportation and other inputs, or disruptions involving our suppliers, could adversely affect our business
Supplier losses, geopolitical events, inflation and energy costs could raise or limit essential oils, alcohols, chemicals, glass, resins, packaging and transportation inputs.
NewRisks related to our Business Operations
Evolving supply chain diligence, sourcing, packaging and product-related requirements could increase our costs, restrict sales of our products or adversely affect our reputation
New U.S., EU and other sourcing, deforestation, conflict-minerals, packaging, labeling and waste rules could raise costs or block product sales.
NewRisks related to our Business Operations
the Company’s global operations will not involve disruptions in our systems or processes having a short term adverse impact on our operations and ability to serve customers and business partners
E-commerce, mobile applications and social-media disruptions, including remote-work security weaknesses and regulation, could reduce sales and digital marketing effectiveness.
NewRisks related to Macroeconomic Conditions and Market Risks
A general economic downturn, credit constriction, inflationary pressures or other adverse macroeconomic conditions could reduce consumer spending and adversely affect our financial results
Recession, inflation, interest rates and weak consumer confidence could reduce beauty purchases, retailer sales and collections in major markets.
NewRisks related to Macroeconomic Conditions and Market Risks
Geopolitical instability, armed conflicts, terrorist activity and other global events could disrupt our business, affect our access to markets and adversely affect our results
Wars, terrorism and geopolitical changes, including the Middle East conflict and China tensions, could raise transport costs, reduce regional sales and restrict market access.
NewRisks Related to Ownership of Our Common Stock
addition, currency fluctuations between the Euro and U.S. dollar may have an adverse impact on the value of our Class A Common Stock traded on Euronext Paris
Limited Euronext Paris liquidity, dual-listing expenses and possible delisting could make positions harder to trade and increase Coty’s costs.

Dropped

DroppedRisks related to our Business Operations
A disruption in operations could adversely affect our business
DroppedRisks related to our Indebtedness
the covenants thereunder, as well as the indentures governing our senior secured notes, please refer to Note 12, “Debt” in the notes to our Consolidated Financial Statements

Reworded

96% rewrittenRisks related to our Business Operations
We use AI in our business, and challenges with properly governing, managing or monitoring its use could result in harm to our brands, reputation, business, operations or customers
AI use expanded from initial implementation to marketing, media allocation, content, translation, demand planning, supply chain, customer engagement and productivity, with broader legal and operational risks.
Was: We use AI in our business, and challenges with properly managing its use could result in harm to our brands, reputation, business or customers
80% rewrittenRisks related to our Business and Industry
Our brand licenses may be terminated if specified conditions are not met, and we may not be able to renew expiring licenses on favorable terms or at all
No substantive change; the risk still concerns breaches, termination or unfavorable renewal of brand licenses.
71% rewrittenRisks related to our Business Operations
Failure of or disruption to one or more of our information technology platforms could affect our ability to execute our operating strategy
The risk now specifically includes implementing and migrating remaining systems to SaaS and cloud-based technology.
65% rewrittenRisks Related to our Business Strategy and Organization
Our success depends on our ability to refine and achieve our global business strategies
Strategy language now emphasizes Coty.Curated, market-share growth, AI-powered operations, advocacy, sustainability and continued deleveraging.
Was: Our success depends on our ability to achieve our global business strategies
64% rewrittenRisks related to our Indebtedness
We have a substantial amount of indebtedness, which may have adverse consequences on our business and impair our ability to be certain that additional financing will be available on reasonable terms when required
No substantive change; debt agreements still restrict borrowing, asset sales, acquisitions, distributions, affiliate transactions and major corporate actions.
47% rewrittenRisks Related to Ownership of Our Common Stock
The dual-listing of our Class A Common Stock on the NYSE and on Euronext Paris’s Professional Segment may adversely affect the liquidity and value of our Class A Common Stock
The prior currency-fluctuation discussion is separated into risk 49, while the dual-listing liquidity and NYSE trading concerns remain.
42% rewrittenLegal and Regulatory Risks
We are subject to legal proceedings and legal compliance risks, including talc-related litigation alleging bodily injury
No substantive change; the risk still covers regulatory enforcement, fines, private claims and legal proceedings.
29% rewrittenRisks Related to our Business Strategy and Organization
We may not be able to identify suitable acquisition targets and our acquisition activities and other strategic transactions may present managerial, integration, operational and financial risks, which may prevent us from realizing the full intended benefit of the acquisitions we undertake
The discussion shifts from completed historical acquisitions to potential future deals, emphasizing candidate availability, financing, favorable terms and deleveraging effects.
28% rewrittenRisks related to our Business Operations
Additional tariffs or other restrictions placed on imports, retaliatory trade measures taken by other countries and resulting trade wars may have a material adverse impact on our financial condition and results of operations
25% rewrittenRisks Related to our Business Strategy and Organization
We have incurred significant costs in connection with the integration of acquisitions and simplifying our business, and expect to incur costs in connection with the implementation of our global business strategies, that could affect our period-to-period operating results
24% rewrittenRisks related to our Business and Industry
Further consolidation in the retail industry and shifting preferences in how and where consumers shop, including to e‑commerce, may adversely affect our business, prospects, financial condition and results of operations
23% rewrittenRisks Related to our Business Strategy and Organization
Our goodwill and other assets have been subject to impairment and may continue to be subject to impairment in the future
23% rewrittenRisks related to our Business Operations
We outsource a number of functions to third-party service providers, and any failure to perform or other disruptions or delays at our third-party service providers could adversely impact our business, our results of operations or our financial condition
22% rewrittenRisks Related to Ownership of Our Common Stock
We are subject to risks related to our common stock and our stock repurchase program
22% rewrittenRisks related to our Business and Industry
Our new product introductions may not be as successful as we anticipate, which could have a material adverse effect on our business, prospects, financial condition and results of operations
22% rewrittenRisks related to our Business and Industry
The beauty industry is highly competitive, and if we are unable to compete effectively, our business, prospects, financial condition and results of operations could suffer

All 50 risk factors

Headings as the filing states them, in filing order.

Risks related to our Business and Industry

01The beauty industry is highly competitive, and if we are unable to compete effectively, our business, prospects, financial condition and results of operations could suffer22% rewritten
02Further consolidation in the retail industry and shifting preferences in how and where consumers shop, including to e‑commerce, may adversely affect our business, prospects, financial condition and results of operations24% rewritten
03Changes in industry trends and consumer preferences could adversely affect our business, prospects, financial condition and results of operations
04Our new product introductions may not be as successful as we anticipate, which could have a material adverse effect on our business, prospects, financial condition and results of operations22% rewritten
05Our success depends, in part, on the quality, efficacy and safety of our products
06Our failure to protect our reputation, or the failure of our brand partners or licensors to protect their reputations, could have a material adverse effect on our brand images
07Our brand licenses may be terminated if specified conditions are not met, and we may not be able to renew expiring licenses on favorable terms or at all80% rewritten
08the aforementioned risks could have a material adverse effect on our business, prospects, financial condition, results of operations, cash flows, as well as the trading price of our securitiesNew
09Our success depends on our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property of third parties
10Our business is subject to seasonal variability

Risks Related to our Business Strategy and Organization

11Our success depends on our ability to refine and achieve our global business strategies65% rewritten
12Potential divestitures, and any retained liabilities from such sold business, could negatively impact our business and financial resultsNew
13We have incurred significant costs in connection with the integration of acquisitions and simplifying our business, and expect to incur costs in connection with the implementation of our global business strategies, that could affect our period-to-period operating results25% rewritten
14We may not be able to identify suitable acquisition targets and our acquisition activities and other strategic transactions may present managerial, integration, operational and financial risks, which may prevent us from realizing the full intended benefit of the acquisitions we undertake29% rewritten
15We face risks associated with our joint ventures and strategic partnership investments
16In certain cases, joint ventures and strategic partnership investments may present us with a lack of ability to fully control all aspects of their operations, including due to veto rights, and we may not have full visibility with respect to all operations, customer relations and compliance practices, among others
17Our goodwill and other assets have been subject to impairment and may continue to be subject to impairment in the future23% rewritten

Risks related to our Business Operations

18A disruption in our manufacturing, distribution, logistics or other operations could adversely affect our businessNew
19Volatility in the cost or availability of raw materials, packaging, transportation and other inputs, or disruptions involving our suppliers, could adversely affect our businessNew
20We outsource a number of functions to third-party service providers, and any failure to perform or other disruptions or delays at our third-party service providers could adversely impact our business, our results of operations or our financial condition23% rewritten
21Evolving supply chain diligence, sourcing, packaging and product-related requirements could increase our costs, restrict sales of our products or adversely affect our reputationNew
22We are increasingly dependent on information technology, and if we are unable to protect against service interruptions, corruption of our data and privacy protections, cyber-based attacks or network security breaches, our operations could be disrupted
23We must continue to maintain and make requisite or critical upgrades to our information technology systems, and our failure to do so could have a material adverse effect on our business, financial condition and results of operations
24Failure to protect sensitive information of our consumers and information technology systems against security breaches could damage our reputation and substantially harm our business, financial condition and results of operations
25Failure of or disruption to one or more of our information technology platforms could affect our ability to execute our operating strategy71% rewritten
26the Company’s global operations will not involve disruptions in our systems or processes having a short term adverse impact on our operations and ability to serve customers and business partnersNew
27We use AI in our business, and challenges with properly governing, managing or monitoring its use could result in harm to our brands, reputation, business, operations or customers96% rewritten
28Our success depends, in part, on our employees, including our key personnel
29If we underestimate or overestimate demand for our products and do not maintain appropriate inventory levels, our net revenues or working capital could be negatively impacted
30We are subject to risks related to our international operations
31Additional tariffs or other restrictions placed on imports, retaliatory trade measures taken by other countries and resulting trade wars may have a material adverse impact on our financial condition and results of operations28% rewritten
32Changes in tax laws or regulations, or challenges to our tax positions, could significantly increase our tax liabilities

Risks related to our Indebtedness

33We have taken on significant debt, and the agreements that govern such debt contain various covenants that impose significant operating and financial restrictions on us, which may adversely affect our business
34We have a substantial amount of indebtedness, which may have adverse consequences on our business and impair our ability to be certain that additional financing will be available on reasonable terms when required64% rewritten
35Our ability to service and repay our indebtedness will be dependent on the cash flow generated by our subsidiaries and events beyond our control
36Our variable rate indebtedness subjects us to interest rate risk, which could cause certain debt service obligations to increase

Risks related to Macroeconomic Conditions and Market Risks

37A general economic downturn, credit constriction, inflationary pressures or other adverse macroeconomic conditions could reduce consumer spending and adversely affect our financial resultsNew
38Geopolitical instability, armed conflicts, terrorist activity and other global events could disrupt our business, affect our access to markets and adversely affect our resultsNew
39Price inflation for labor, materials and services, further exacerbated by volatility in energy and commodity markets by geopolitical events, could adversely affect our business, results of operations and financial condition
40Volatility in the financial markets could have a material adverse effect on our business, prospects, financial condition, results of operations, cash flows, as well as the trading price of our securities
41Fluctuations in currency exchange rates may negatively impact our financial condition and results of operations

Legal and Regulatory Risks

42We are subject to legal proceedings and legal compliance risks, including talc-related litigation alleging bodily injury42% rewritten
43Changes in laws, regulations and policies that affect our business or products could adversely affect our business, financial condition, results of operations, cash flows, as well as the trading price of our securities
44Our operations and acquisitions in certain foreign areas expose us to political, regulatory, economic and reputational risks
45Our employees or others may engage in misconduct or other improper activities including noncompliance with regulatory standards and regulatory requirements
46Violations of our prohibition on harassment, sexual or otherwise, could result in liabilities and/or litigation

Risks Related to Ownership of Our Common Stock

47We are subject to risks related to our common stock and our stock repurchase program22% rewritten
48JAB Beauty B.V. (“JAB”) and its affiliates beneficially own approximately 54% of the fully diluted shares of our Class A Common Stock and, as such, have the ability to effect certain decisions requiring stockholder approval, which may be inconsistent with the interests of our other stockholders
49The dual-listing of our Class A Common Stock on the NYSE and on Euronext Paris’s Professional Segment may adversely affect the liquidity and value of our Class A Common Stock47% rewritten
50addition, currency fluctuations between the Euro and U.S. dollar may have an adverse impact on the value of our Class A Common Stock traded on Euronext ParisNew

Other COTY 10-Ks

FY2025 10-K risk factors
43 risks
Coty relies heavily on international operations, generating 73% of net revenues outside North America. High indebtedness and restrictive credit covenants constrain financial and operational flexibility. Retail consolidation increases reliance on fewer key customers controlling retail locations.
Filed Aug 21, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.