COTY INC. (Exact Name of Registrant As Specified in Its Charter)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2018 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM COMMISSION FILE NUMBER 001-35964 TO COTY INC. (Exact name of registrant as specified in its charter) <ul style="display: flex;"><li style="flex:1">Delaware </li><li style="flex:1">13-3823358 </li></ul><ul style="display: flex;"><li style="flex:1">(State or other jurisdiction of incorporation or organization) </li><li style="flex:1">(I.R.S. Employer Identification Number) </li></ul><ul style="display: flex;"><li style="flex:1">350 Fifth Avenue, New York, NY </li><li style="flex:1">10118 </li></ul><ul style="display: flex;"><li style="flex:1">(Address of principal executive offices) </li><li style="flex:1">(Zip Code) </li></ul>(212) 389-7300 Registrant’s telephone number, including area code Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. <ul style="display: flex;"><li style="flex:1">Large accelerated filer ý </li><li style="flex:1">Accelerated filer ¨ </li></ul><ul style="display: flex;"><li style="flex:1">Non-accelerated filer ¨ </li><li style="flex:1">Smaller reporting company </li></ul>Emerging growth company ¨¨If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý At October 31, 2018, 751,075,098 shares of the registrant’s Class A Common Stock, $0.01 par value, were outstanding. COTY INC. INDEX TO FORM 10-Q Page <ul style="display: flex;"><li style="flex:1">Part I: </li><li style="flex:1">FINANCIAL INFORMATION </li></ul><ul style="display: flex;"><li style="flex:1">Item 1. </li><li style="flex:1">Condensed Consolidated Financial Statements (Unaudited) </li><li style="flex:1">1</li></ul>123 Condensed Consolidated Statements of Operations for the three months ended September 30, 2018 and 2017 Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended September 30, 2018 and 2017 Condensed Consolidated Balance Sheets as of September 30, 2018 and June 30, 2018 Condensed Consolidated Statements of Equity and Redeemable Noncontrolling Interests for the three months ended September <ul style="display: flex;"><li style="flex:1">30, 2018 and 2017 </li><li style="flex:1">4</li></ul><ul style="display: flex;"><li style="flex:1">6</li><li style="flex:1">Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2018 and 2017 </li></ul><ul style="display: flex;"><li style="flex:1">Notes to Condensed Consolidated Financial Statements </li><li style="flex:1">7</li></ul>Item 2. Item 3. Item 4. Management’s Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk 28 49 <ul style="display: flex;"><li style="flex:1">49 </li><li style="flex:1">Controls and Procedures </li></ul>Part II: Item 1. Item 1A. Item 2. Item 6. OTHER INFORMATION <ul style="display: flex;"><li style="flex:1">Legal Proceedings </li><li style="flex:1">50 </li></ul>50 50 51 Risk Factors Unregistered Sales of Equity Securities and Use of Proceeds Exhibits <ul style="display: flex;"><li style="flex:1">Signatures </li><li style="flex:1">52 </li></ul>Table of Contents PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements COTY INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited) Three Months Ended September 30, 2018 2,031.3 2017 <ul style="display: flex;"><li style="flex:1">2,238.3 </li><li style="flex:1">Net revenues </li><li style="flex:1">$</li><li style="flex:1">$</li></ul><ul style="display: flex;"><li style="flex:1">Cost of sales </li><li style="flex:1">809.1 </li></ul>1,222.2 1,122.3 92.5 874.2 1,364.1 1,191.1 78.2 Gross profit Selling, general and administrative expenses Amortization expense <ul style="display: flex;"><li style="flex:1">Restructuring costs </li><li style="flex:1">15.5 </li><li style="flex:1">11.2 </li></ul>Acquisition-related costs Asset impairment charges Operating (loss) income Interest expense, net Other expense, net <ul style="display: flex;"><li style="flex:1">—</li><li style="flex:1">54.1 </li></ul><ul style="display: flex;"><li style="flex:1">12.6 </li><li style="flex:1">—</li></ul>(20.7) 64.1 29.5 66.4 <ul style="display: flex;"><li style="flex:1">2.7 </li><li style="flex:1">4.5 </li></ul>Loss before income taxes Benefit for income taxes Net loss (87.5) (77.4) (10.1) 1.2 (41.4) (25.3) (16.1) (2.2) 5.8 Net income (loss) attributable to noncontrolling interests <ul style="display: flex;"><li style="flex:1">Net income attributable to redeemable noncontrolling interests </li><li style="flex:1">0.8 </li></ul><ul style="display: flex;"><li style="flex:1">$</li><li style="flex:1">(12.1) </li><li style="flex:1">$</li><li style="flex:1">(19.7) </li><li style="flex:1">Net loss attributable to Coty Inc. </li></ul>Net loss attributable to Coty Inc. per common share: <ul style="display: flex;"><li style="flex:1">Basic </li><li style="flex:1">$</li><li style="flex:1">(0.02) </li></ul>(0.02) <ul style="display: flex;"><li style="flex:1">$</li><li style="flex:1">(0.03) </li></ul><ul style="display: flex;"><li style="flex:1">(0.03) </li><li style="flex:1">Diluted </li></ul>Weighted-average common shares outstanding: <ul style="display: flex;"><li style="flex:1">Basic </li><li style="flex:1">750.8 </li></ul>750.8 748.6 <ul style="display: flex;"><li style="flex:1">748.6 </li><li style="flex:1">Diluted </li></ul>See notes to Condensed Consolidated Financial Statements. 1Table of Contents COTY INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In millions) (Unaudited) Three Months Ended September 30, <ul style="display: flex;"><li style="flex:1">2018 </li><li style="flex:1">2017 </li></ul><ul style="display: flex;"><li style="flex:1">Net loss </li><li style="flex:1">$</li><li style="flex:1">(10.1) </li><li style="flex:1">$</li><li style="flex:1">(16.1) </li></ul>Other comprehensive (loss) income: <ul style="display: flex;"><li style="flex:1">Foreign currency translation adjustment </li><li style="flex:1">(48.9) </li></ul>1.0 239.1 (0.1) Net unrealized derivative gain (loss) on cash flow hedges, net of taxes of $(0.3) and $(0.1) during the three months ended, respectively Pension and other post-employment benefits adjustment, net of tax of $0.5 and nil during the three months ended, <ul style="display: flex;"><li style="flex:1">respectively </li><li style="flex:1">0.1 </li><li style="flex:1">0.7 </li></ul>239.7 223.6 Total other comprehensive (loss) income, net of tax Comprehensive (loss) income (47.8) (57.9) Comprehensive income (loss) attributable to noncontrolling interests: <ul style="display: flex;"><li style="flex:1">Net income (loss) </li><li style="flex:1">1.2 </li></ul>0.2 1.4 (2.2) <ul style="display: flex;"><li style="flex:1">0.6 </li><li style="flex:1">Foreign currency translation adjustment </li></ul>Total comprehensive income (loss) attributable to noncontrolling interests Comprehensive income attributable to redeemable noncontrolling interests: Net income (1.6) 0.8 — 5.8 <ul style="display: flex;"><li style="flex:1">—</li><li style="flex:1">Foreign currency translation adjustment </li></ul><ul style="display: flex;"><li style="flex:1">Total comprehensive income attributable to redeemable noncontrolling interests </li><li style="flex:1">0.8 </li><li style="flex:1">5.8 </li></ul><ul style="display: flex;"><li style="flex:1">$</li><li style="flex:1">(60.1) </li><li style="flex:1">$</li><li style="flex:1">219.4 </li><li style="flex:1">Comprehensive (loss) income attributable to Coty Inc. </li></ul>See notes to Condensed Consolidated Financial Statements. 2Table of Contents COTY INC. & SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except per share data) (Unaudited) September 30, 2018 June 30, 2018 ASSETS Current assets: Cash and cash equivalents Restricted cash <ul style="display: flex;"><li style="flex:1">$</li><li style="flex:1">423.3 </li><li style="flex:1">$</li><li style="flex:1">331.6 </li></ul>29.9 1,484.4 1,251.2 551.2 30.6 1,536.0 1,148.9 603.9 Trade receivables—less allowances of $76.1 and $81.8, respectively Inventories Prepaid expenses and other current assets <ul style="display: flex;"><li style="flex:1">Total current assets </li><li style="flex:1">3,740.0 </li></ul>1,648.0 8,570.1 8,218.9 219.0 3,651.0 1,680.8 8,607.1 8,284.4 107.4 Property and equipment, net Goodwill Other intangible assets, net Deferred income taxes Other noncurrent assets <ul style="display: flex;"><li style="flex:1">196.7 </li><li style="flex:1">299.5 </li></ul><ul style="display: flex;"><li style="flex:1">$</li><li style="flex:1">22,592.7 </li><li style="flex:1">$</li><li style="flex:1">22,630.2 </li></ul>TOTAL ASSETS LIABILITIES AND EQUITY Current liabilities: <ul style="display: flex;"><li style="flex:1">Accounts payable </li><li style="flex:1">$</li><li style="flex:1">1,794.9 </li></ul>1,737.7 200.7 <ul style="display: flex;"><li style="flex:1">$</li><li style="flex:1">1,928.6 </li></ul>1,844.4 218.9 Accrued expenses and other current liabilities Short-term debt and current portion of long-term debt Income and other taxes payable Total current liabilities <ul style="display: flex;"><li style="flex:1">57.8 </li><li style="flex:1">52.1 </li></ul>3,791.1 7,789.7 532.9 4,044.0 7,305.4 533.3 Long-term debt, net Pension and other post-employment benefits Deferred income taxes <ul style="display: flex;"><li style="flex:1">841.1 </li><li style="flex:1">842.5 </li></ul>Other noncurrent liabilities <ul style="display: flex;"><li style="flex:1">402.6 </li><li style="flex:1">388.5 </li></ul><ul style="display: flex;"><li style="flex:1">Total liabilities </li><li style="flex:1">13,357.4 </li><li style="flex:1">13,113.7 </li></ul>COMMITMENTS AND CONTINGENCIES (See Note 18) REDEEMABLE NONCONTROLLING INTERESTS EQUITY: <ul style="display: flex;"><li style="flex:1">622.2 </li><li style="flex:1">661.3 </li></ul>Preferred Stock, $0.01 par value; 20.0 shares authorized, 5.0 issued and outstanding, at September 30, 2018 and <ul style="display: flex;"><li style="flex:1">June 30, 2018 </li><li style="flex:1">—</li><li style="flex:1">—</li></ul>Class A Common Stock, $0.01 par value; 1,000.0 shares authorized, 815.8 issued and 750.8 and 750.7 <ul style="display: flex;"><li style="flex:1">outstanding, respectively, at September 30, 2018 and June 30, 2018 </li><li style="flex:1">8.1 </li></ul>10,699.5 (769.1) 110.8 8.1 10,750.8 (626.2) 158.8 Additional paid-in capital Accumulated deficit Accumulated other comprehensive income Treasury stock—at cost, shares: 65.0 at September 30, 2018 and June 30, 2018 Total Coty Inc. stockholders’ equity Noncontrolling interests (1,441.8) 8,607.5 5.6 (1,441.8) 8,849.7 5.5 <ul style="display: flex;"><li style="flex:1">Total equity </li><li style="flex:1">8,613.1 </li></ul>22,592.7 8,855.2 <ul style="display: flex;"><li style="flex:1">22,630.2 </li><li style="flex:1">$</li><li style="flex:1">$</li><li style="flex:1">TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY </li></ul>See notes to Condensed Consolidated Financial Statements. 3Table of Contents COTY INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS For the Three Months Ended September 30, 2018 (In millions, except per share data) (Unaudited) Class A Common Stock Accumulated Other Comprehensive Income (Loss) Total Coty Inc. Stockholders’ Equity Preferred Stock Shares Amount Additional Paid-in Capital <ul style="display: flex;"><li style="flex:1">Treasury Stock </li><li style="flex:1">Redeemable </li></ul>Noncontrolling Interests (Accumulated Deficit) Noncontrolling Interests Total Equity <ul style="display: flex;"><li style="flex:1">Shares </li><li style="flex:1">Amount </li><li style="flex:1">Shares </li><li style="flex:1">Amount </li></ul>BALANCE as previously reported— <ul style="display: flex;"><li style="flex:1">July 1, 2018 </li><li style="flex:1">5.0 </li><li style="flex:1">$</li><li style="flex:1">—</li><li style="flex:1">815.8 </li><li style="flex:1">$</li><li style="flex:1">8.1 </li><li style="flex:1">$ 10,750.8 </li><li style="flex:1">$</li></ul>$<ul style="display: flex;"><li style="flex:1">(626.2) </li><li style="flex:1">$</li><li style="flex:1">158.8 </li><li style="flex:1">65.0 </li></ul>65.0 <ul style="display: flex;"><li style="flex:1">$ (1,441.8) </li><li style="flex:1">$</li><li style="flex:1">8,849.7 </li><li style="flex:1">$</li><li style="flex:1">5.5 </li><li style="flex:1">$ 8,855.2 </li><li style="flex:1">$</li><li style="flex:1">661.3 </li></ul>Adjustment due to the adoption of ASU <ul style="display: flex;"><li style="flex:1">2016-16 (See Note 2) </li><li style="flex:1">(112.6) </li><li style="flex:1">(112.6) </li><li style="flex:1">(112.6) </li></ul>Adjustment due to the adoption of ASC <ul style="display: flex;"><li style="flex:1">606 (See Note 3) </li><li style="flex:1">(18.2) </li><li style="flex:1">(18.2) </li><li style="flex:1">(18.2) </li></ul><ul style="display: flex;"><li style="flex:1">BALANCE as adjusted—July 1, 2018 </li><li style="flex:1">5.0 </li><li style="flex:1">$</li><li style="flex:1">—</li><li style="flex:1">815.8 </li><li style="flex:1">$</li><li style="flex:1">8.1 </li><li style="flex:1">$ 10,750.8 </li><li style="flex:1">(757.0) </li><li style="flex:1">$</li><li style="flex:1">158.8 </li><li style="flex:1">$ (1,441.8) </li><li style="flex:1">$</li><li style="flex:1">8,718.9 </li><li style="flex:1">$</li><li style="flex:1">5.5 </li><li style="flex:1">$ 8,724.4 </li><li style="flex:1">$</li><li style="flex:1">661.3 </li></ul>Exercise of employee stock options and <ul style="display: flex;"><li style="flex:1">restricted stock units </li><li style="flex:1">—</li><li style="flex:1">—</li><li style="flex:1">0.7 </li></ul>6.4 0.7 6.4 0.7 <ul style="display: flex;"><li style="flex:1">6.4 </li><li style="flex:1">Share-based compensation expense </li></ul>Dividends ($0.125 per Common Share) Net income (loss) <ul style="display: flex;"><li style="flex:1">(94.0) </li><li style="flex:1">(94.0) </li></ul>(12.1) (48.0) (94.0) (10.9) (47.8) <ul style="display: flex;"><li style="flex:1">(12.1) </li><li style="flex:1">1.2 </li></ul>0.2 0.8 <ul style="display: flex;"><li style="flex:1">Other comprehensive loss </li><li style="flex:1">(48.0) </li></ul>Distribution to noncontrolling <ul style="display: flex;"><li style="flex:1">interests, net </li><li style="flex:1">—</li><li style="flex:1">(1.3) </li><li style="flex:1">(1.3) </li></ul>(1.6) (4.3) 1.6 Additional redeemable noncontrolling interests due to employee grants (See <ul style="display: flex;"><li style="flex:1">Note 17) </li><li style="flex:1">(1.6) </li><li style="flex:1">(1.6) </li></ul>Adjustment of redeemable noncontrolling interests to redemption <ul style="display: flex;"><li style="flex:1">value </li><li style="flex:1">37.2 </li><li style="flex:1">37.2 </li><li style="flex:1">37.2 </li><li style="flex:1">(37.2) </li></ul><ul style="display: flex;"><li style="flex:1">5.0 </li><li style="flex:1">$</li><li style="flex:1">—</li><li style="flex:1">815.8 </li><li style="flex:1">$</li><li style="flex:1">8.1 </li><li style="flex:1">$ 10,699.5 </li><li style="flex:1">$</li><li style="flex:1">(769.1) </li><li style="flex:1">$</li><li style="flex:1">110.8 </li><li style="flex:1">65.0 </li><li style="flex:1">$ (1,441.8) </li><li style="flex:1">$</li><li style="flex:1">8,607.5 </li><li style="flex:1">$</li><li style="flex:1">5.6 </li><li style="flex:1">$ 8,613.1 </li><li style="flex:1">$</li><li style="flex:1">622.2 </li></ul>BALANCE—September 30, 2018 See notes to Condensed Consolidated Financial Statements. 4Table of Contents COTY INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS For the Three Months Ended September 30, 2017 (In millions, except per share data) (Unaudited) Class A Common Stock Accumulated Other Comprehensive Income Total Coty Inc. Stockholders’ Equity Preferred Stock Shares Amount Additional Paid-in Capital <ul style="display: flex;"><li style="flex:1">Treasury Stock </li><li style="flex:1">Redeemable </li></ul>Noncontrolling Interests (Accumulated Deficit) Noncontrolling Interests Total Equity <ul style="display: flex;"><li style="flex:1">Shares </li><li style="flex:1">Amount </li><li style="flex:1">Shares </li><li style="flex:1">Amount </li></ul>

COTY INC. (Exact Name of Registrant As Specified in Its Charter)

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