Coty Inc. Under Investigation for Possible Misrepresentation of Inventory Issues

Coty Inc. (NYSE: COTY), one of the largest beauty corporations in the world, is presently under investigation by Hagens Berman, a notable law firm dedicated to protecting shareholder rights. The inquiry emerged on September 19, 2025, following a considerable decline in Coty's stock price, which plummeted by 21% on August 21, 2025. This drop was reportedly linked to the company's announcement regarding "retailer inventory destocking issues" as part of its disappointing Q4 financial report and results for the entire year.

Hagens Berman aims to determine whether Coty misled investors about its financial growth trajectory and the effectiveness of its digital inventory management strategy, identified as SAP S/4HANA. The law firm is actively encouraging any investors who suffered significant losses to promptly come forward. Additionally, individuals with pertinent information that could aid in the investigation are urged to contact the firm's attorneys.

Since August 2024, Coty has maintained that its transition to a digital inventory system was seamless, stating that the implementation proceeded without notable hindrances. However, more recent disclosures regarding retailer destocking—where retailers reduce excess inventory—seemingly contradict earlier assertions of the company's successful growth. The investigation is currently delving into whether Coty may have intentionally over-supplied its retail partners, masking its internal inventory build-up to meet earnings expectations, a practice deemed potentially misleading for investors.

In terms of financial performance, the earnings report from August 21 revealed a significant year-over-year decline in revenue across Coty's Prestige and Consumer Beauty segments, which collectively account for approximately 65% and 35% of the company’s income, respectively. The company attributed the downturn in performance partially to the same inventory issues that had been previously downplayed, triggering a swift and steep dip in the value of its stock, which has yet to rebound.

Hagens Berman is investigating whether Coty and its executives made material misrepresentations that left investors unaware of the real state of the company's finances. Reed Kathrein, the partner overseeing the investigation, commented, "The matter at hand is whether Coty's management purposefully minimized the inventory issues to display an overly optimistic outlook to the market."

For individuals who have invested in Coty and experienced notable financial losses, as well as those who might possess knowledge that could support the investigation, Hagens Berman encourages immediate submissions of their losses for further examination.

Importantly, whistleblowers possessing non-public information about Coty have avenues available to assist in this investigation and may also benefit from the SEC Whistleblower program. Under the new regulations, whistleblowers can potentially receive rewards up to 30% of any successful recovery finalized by the SEC based on their information. Interested individuals can get in touch with Reed Kathrein directly for further details.

Hagens Berman has established itself as a preeminent law firm that represents a broad spectrum of clients including investors, whistleblowers, and consumers who have suffered because of corporate negligence or other improprieties. They have successfully secured over $2.9 billion on behalf of their clients and continue to focus on holding corporations accountable for their actions. For updates and more information about the firm's mission and achievements, visit their website or follow them on social media.

For assistance with potential claims against Coty, you may reach out via [email protected] or contact them at 844-916-0895. This investigation highlights the vital role that accurate corporate communications play in maintaining investor trust and market integrity.