The Company is involved, from time to time, in various litigation, administrative and other legal proceedings, including regulatory actions, incidental or related to its business, including consumer class or collective actions, personal injury (mostly involving allegations related to alleged asbestos in the Company’s talc-based cosmetic products as described below), intellectual property, competition, compliance and advertising claims litigation and disputes, among others (collectively, “Legal Proceedings”). While the Company cannot predict any final outcomes relating thereto, management believes that the outcome of current Legal Proceedings will not have a material effect upon its business, prospects, financial condition, results of operations, cash flows or the trading price of the Company’s securities, except for certain aspects related to litigation involving cosmetic talcum powder discussed below. However, management’s assessment of the Company’s current Legal Proceedings is ongoing, and could change in light of the discovery of additional facts with respect to Legal Proceedings not presently known to the Company, further legal analysis, or determinations by judges, arbitrators, juries or other finders of fact or deciders of law which are not in accord with management’s evaluation of the probable liability or outcome of such Legal Proceedings. From time to time, the Company is in discussions with regulators, including discussions initiated by the Company, about actual or potential violations of law in order to remediate or mitigate associated legal or compliance risks and liabilities or penalties. As the outcomes of such proceedings are unpredictable, the Company can give no assurance that the results of any such proceedings will not materially affect its reputation, business, prospects, financial condition, results of operations, cash flows or the trading price of its securities.

Cosmetic Talcum Powder Matters. The Company has been named as a defendant in numerous civil actions alleging that certain cosmetic talcum powder products sold by the Company were contaminated with asbestos leading to bodily injury. Most of these actions involve a number of co-defendants and, to date, many such actions have been resolved by dismissal, settlement or other resolution acceptable to the Company. While the Company and its legal counsel intend to continue to defend these cases vigorously as well as exploring various means of resolving claims before trial, there can be no assurances regarding the ultimate resolution of these matters, individually or collectively.

In each of the previous fiscal years the value of settlements, both individually and in the aggregate, has not been material; however, due to the rising number of filed and pending cases against the Company, as well as the evolving litigation landscape, inclusive of significant judgments and settlements by third party companies, settlement values and other costs associated with these cases have increased substantially and are expected to increase in the future. In addition, the Company has experienced higher recent settlement demands and volumes driven in part by the maturation of cases that have been previously filed and are now reaching the trial stage as well as the general nature of litigation in this area which sometimes involves expedited trial dates.

estimates can be affected by various factors such as whether the damages are substantiated, status of discovery, including experts, stage of proceedings, the court where the claim is filed, whether significant facts are in dispute, and the number of parties in the claim. The range of reasonably possible losses in excess of accrued liabilities currently cannot be reasonably estimated.

Certain Other Litigation. A purported stockholder class action complaint captioned Srinivasan v. Coty Inc., et al., Case No. 1:26-cv-02343-RA (S.D.N.Y.), was filed on March 23, 2026 by a putative stockholder against the Company and certain current and former officers of the Company in the U.S. District Court for the Southern District of New York. The plaintiff alleges that certain of the Company’s statements in November 2025 regarding its fiscal year 2026 earnings guidance were materially false and/or misleading. The plaintiff asserts claims under the federal securities laws and seeks, among other things, monetary damages.

On April 3, 2026 and April 14, 2026, respectively, two stockholder derivative lawsuits were filed in the Supreme Court of the State of New York (County of New York), captioned Fernicola v. Nabi, et al., Index No. 154383/2026, and Mody v. Ballini, et al., Index No. 652215/2026, against certain current and former Coty officers and board members. The complaints assert causes of action of breach of fiduciary duty, gross mismanagement, unjust enrichment, and waste of corporate assets, based on the same allegations as the putative securities class action. On behalf of the Company, the complaint seeks unspecified monetary damages, governance reforms, and fees and costs.

On April 9, 2026, a derivative lawsuit was filed in the U.S. District Court for the Southern District of New York, captioned Moar v. Nabi, et al., Case No. 12:36-cv-02931-RA (S.D.N.Y.), against certain current and former Coty officers and board members. The complaint asserts claims of violations of Section 14(a) of the Exchange Act, breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and contribution, based on allegedly false and/or misleading statements made in August and November 2025 and in its September 2025 Proxy Statement regarding the Company’s earnings guidance and risk oversight. On behalf of the Company, the complaint seeks unspecified monetary damages, governance reforms, and fees and costs.

Assessment received

Type of assessment

Type of Tax

Tax period impacted

Estimated amount, including interest and penalties as of

March 31, 2026

Aug-20

State sales tax credits, which the Treasury Office of the State of Goiás considers as improperly registered

ICMS

2017-2019

R$839.6 million (approximately $159.8)

Oct-20

Federal excise taxes, which the Treasury Office of the Brazil’s Internal Revenue Service considers as improperly calculated

IPI

2016-2017

R$501.7 million (approximately $95.5)

Nov-22

IPI

2018-2019

R$509.0 million (approximately $96.9) (a)

Mar-24

IPI

2020

R$39.5 million (approximately $7.5)

Nov-20

State sales taxes, which the Treasury Office of the State of Minas Gerais considers as improperly calculated

ICMS

2016-2019

R$260.0 million (approximately $49.5)

Jun-21

State sales tax, which the Treasury Office of the State of Goiás considers as improperly calculated

ICMS

2016-2020

R$0.0 million (approximately $0.0) (b)



(a) During the first quarter of the current fiscal year, the tax assessment was revised as the case progressed through the Brazilian judicial system. As part of this reassessment, previously applied penalties were excluded in accordance with applicable tax regulations. As a result, the total liability was reduced compared to the prior assessment in the previous fiscal year.
(b) During the first quarter of the current fiscal year, the administrative case was decided in Coty's favor and prevailed against the tax authorities' appeal.

For the Goiás State tax ICMS assessment received in August 2020, the Company has in parallel a judicial case about an additional claim for fees over the tax incentive ("the Protege Fee") wherein the Company asserts such fee was not enforceable against Coty due to its prior contractual agreement with the Goiás State. In the second quarter of fiscal 2024, the Company filed appeals to be remitted to the third instance Brazilian Superior Court of Justice and, in the last quarter of fiscal 2024, a judge of the Superior Court of Justice ruled against the Company. The Company filed an interlocutory appeal for the full bench of judges on the Superior Court of Justice to review the case, and the court rendered a verdict granting the Company's request to remand the case to the state court of Goiás in the first quarter of the fiscal year. The case is expected to be heard in the first half of fiscal 2027. The Company has been required to provide surety bonds of R$205.5 million (approximately $39.1) and cash deposits of R$227.3 million (approximately $43.3) as of March 31, 2026, to guarantee payment if the case is resolved against Coty. The cash deposits are included in the Other Noncurrent Assets on the Condensed Consolidated Balance Sheet.

In relation to the judicial case for the Goiás State tax ICMS assessment received in August 2020, this case has moved into the judicial court in October 2024, relating to a tax assessment demanding payment of the underlying ICMS taxes due to non-payment of the Protege Fee. The case is running in parallel of the Protege Fee case above. In the third quarter of fiscal 2025, the Goiás State filed a tax enforcement against the Company to collect the ICMS taxes. In response to the enforcement, the Company has obtained a stay pending the Protege Fee case. The Company has been required to provide surety bonds of R$541.9 million (approximately $103.2) as of March 31, 2026, to guarantee payment if the case is resolved against Coty.

The Company expects that cases may move from the administrative to the judicial process in case Coty does not receive a favorable decision at the administrative level, although the exact timing is uncertain. For cases in the judicial process, the Company will be required to make a judicial deposit or enter into a surety bond for the disputed tax assessment, interest and penalties. The judicial process in Brazil is likely to take a number of years to conclude. The Company is seeking favorable judicial and administrative decisions on the tax enforcement actions filed by the tax authorities for these assessments. The Company believes it has meritorious defenses and it has not recognized a loss for these assessments as the Company does not believe a loss is probable.