Did Coty Overload Retailers to Mask Inventory Issues? Investigation Seeks to Answer the Question -- Hagens Berman

SAN FRANCISCO, Sept. 16, 2025 /PRNewswire/ -- Hagens Berman, a prominent shareholder rights law firm, is probing Coty Inc. (NYSE: COTY), one of the world's largest beauty companies. The investigation follows a significant 21% drop in Coty's stock price on August 21, 2025, after the company disclosed what it called "retailer inventory destocking issues" alongside its weak Q4 and full-year financial results.

Hagens Berman is looking into whether Coty may have misled investors about its growth trajectory and the success of its digital inventory strategy, known as SAP S/4HANA.

The firm urges investors in Coty who suffered significant losses to submit your losses now. The firm also encourages persons with knowledge who may be able to assist in the investigation to contact its attorneys.

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Coty Inc. (COTY) Investigation:

Since August 2024, Coty has repeatedly stated that its digital transition "went off without a hitch." However, the recent disclosures about retailer "destocking"—a term for retailers reducing their excess inventory—appear to be at odds with those earlier, optimistic claims. The investigation is exploring whether Coty may have been deliberately shipping excess inventory to its retail partners to mask its own inventory buildup and meet its earnings expectations, an undisclosed sales practice that would be misleading to investors.

The August 21 earnings report revealed a steep year-over-year revenue decrease in both the Prestige and Consumer Beauty segments, which make up about 65% and 35% of the company's revenue, respectively. The company blamed this weak performance, in part, on the same retailer inventory issues it had previously downplayed. This revelation led to a swift and sharp decline in the stock's value, which has not recovered.

Hagens Berman's Investigation on Behalf of Investors

Hagens Berman is now investigating whether Coty and its executives made material misrepresentations that kept investors in the dark about the company's true financial condition.

"The question for us is whether Coty's management may have intentionally downplayed the inventory problems to present an overly optimistic picture to the market," said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you invested in Coty and have substantial losses, or have knowledge that may assist the firm's investigation, submit your losses now »

If you'd like more information and answers to frequently asked questions about the Coty investigation, read more »

Whistleblowers: Persons with non-public information regarding Coty should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

SOURCE Hagens Berman Sobol Shapiro LLP