EQUITY AND CONVERTIBLE PREFERRED STOCK

12 Months Ended

Jun. 30, 2024

Equity [Abstract]

EQUITY AND CONVERTIBLE PREFERRED STOCK

EQUITY AND CONVERTIBLE PREFERRED STOCK

Common Stock

As of June 30, 2024, the Company’s Common Stock consisted of Class A Common Stock with a par value of $0.01 per share. The holders of Class A Common Stock are entitled to one vote per share. As of June 30, 2024, total authorized shares of Class A Common Stock was 1,250.0 million and total outstanding shares of Class A Common Stock was 867.8 million.

In the fiscal years ended June 30, 2024, 2023, and 2022, the Company issued 9.8, 13.8, and 3.3 million shares of its Class A Common Stock, respectively, and received $13.5, $0.9, and nil in cash, in connection with the exercise of employee stock options and settlement of RSUs.

On September 29, 2023 and October 2, 2023, the Company issued a total of 33.0 million shares of Class A common stock, par value $0.01 per share, at a public offering price of $10.80 (or €10.28) per share in a global offering (the “Offering”). The Company also announced the admission to listing and trading of its Common Stock on the professional segment of the Euronext Paris.

The Company received $348.4 from the Offering, net of $10.0 of underwriting fees. Additionally, the Company incurred $6.0 in other professional fees. The underwriting fees and other professional fees incurred in connection with the Offering were incremental costs directly attributable to the issuance and thus were presented as a reduction of Equity in the Consolidated Balance Sheets.

During the fiscal year ended June 30, 2022, the Company issued 69.9 million shares of its Class A Common Stock as a result of conversions of Series B Preferred Stock.

The Company’s Majority Stockholder

During the fiscal years ended June 30, 2024, 2023 and 2022, JAB Beauty B.V. (“JAB”), the Company’s largest stock holder, acquired 3.0, 0.0 and 0.0 million shares, respectively, of Class A Common Stock in the open market.

As of June 30, 2024 JAB may be deemed to beneficially own approximately 55% of Coty’s Class A Common Stock. This is inclusive of all voting interests of Mr. Peter Harf, the Company's Chairman, and HFS Holdings S.à r.l, (“HFS”), which is beneficially owned by Mr. Harf, including its shares of Series B Preferred Stock on an if converted basis.

The Company’s CEO, Sue Nabi, was granted a one-time sign-on award of restricted stock units on June 30, 2021. On October 29, 2021 and September 18, 2023, JAB completed the transfer of 10.0 million and 5.0 million shares of Common Stock, respectively, to Ms. Nabi pursuant to an equity transfer agreement. See Note 22—Share-Based Compensation Plans for additional information.

Preferred Stock

As of June 30, 2024, total authorized shares of preferred stock are 20.0 million.

Series A Preferred Stock

As of June 30, 2024, there were 1.0 million shares of Series A Preferred Stock, par value of $0.01 per share, authorized, issued and outstanding. Series A Preferred Stock are not entitled to receive any dividends and have no voting rights except as required by law.

On March 27, 2017 a Series A Preferred Stock subscription agreement was entered into with Lambertus J.H. Becht (“Mr. Becht”), the Company’s former Chairman of the Board. Under the terms provided in the subscription agreement, the Series A Preferred Stock immediately vested on the grant date and the holder was entitled to exchange the vested shares after the fifth anniversary of the date of issuance. This exchange right expired on March 27, 2024. The Company has the right to redeem the Series A Preferred Stock (1.0 million shares) at a redemption price of $0.01 per share. The Company plans to redeem these shares of Series A Preferred Stock in accordance with their terms.

An (income) expense of $(0.8), $0.2, and $(0.2) was recorded during fiscal 2024, 2023 and 2022, respectively, and has been included in Selling, general and administrative expenses on the Consolidated Statements of Operations. As of June 30, 2024 and 2023, the Company classified nil and $0.8, respectively, of Series A Preferred Stock as a liability, recorded in Other noncurrent liabilities in the Consolidated Balance Sheet.

Convertible Series B Preferred Stock

In 2020, the Company completed the issuance and sale to KKR Aggregator of 1.0 million shares of Convertible Series B Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”), for an aggregate purchase price of $1,000 per share. On August 27, 2021, KKR Aggregator and affiliated investment funds sold 146,057 shares of Series B Preferred Stock, to HFS Holdings S.à r.l, that is beneficially owned by Peter Harf, a director of the Company.

As a result of various conversions and exchanges of KKR Aggregator's shares of the Series B Preferred Stock, as of December 31, 2021, KKR has fully redeemed/exchanged all of their Series B Preferred Stock.

Cumulative preferred dividends accrue daily on the Series B Preferred Stock at a rate of 9.0% per year. During the twelve months ended June 30, 2024, 2023 and 2022, the Board of Directors declared dividends on the Series B Preferred Stock of

$13.2, $13.2 and $35.2, paid accrued dividends of $13.2, $13.2 and $55.8 and converted/exchanged dividends of nil, nil and $50.1, respectively. As of June 30, 2024 and 2023, the Series B Preferred Stock had outstanding accrued dividends of $3.3.

Dividends - Common Stock

On April 29, 2020, the Board of Directors suspended the payment of dividends on Common Stock. No dividends on Common Stock were declared for the year ended June 30, 2024.

The change in dividends accrued recorded to APIC in the Consolidated Balance Sheet as of June 30, 2024, 2023 and 2022 was nil, $0.1 and $0.8, respectively, which represent dividends no longer expected to vest as a result of forfeitures of outstanding restricted stock units (“RSUs”). In addition, the Company made payments of $0.3 and $0.7, of which $0.1 and $0.2 related to employee taxes, and $1.4 for the previously accrued dividends on RSUs that vested during the twelve months ended June 30, 2024, 2023 and 2022, respectively.

Total accrued dividends on unvested RSUs and phantom units included in Accrued expenses and other current liabilities are $0.8 and $1.0 as of June 30, 2024 and 2023, respectively. In addition, accrued dividends of $0.0 and $0.1 are included in Other noncurrent liabilities as of June 30, 2024 and 2023, respectively.

Treasury Stock - Share Repurchase Program

Since February 2014, the Board has authorized the Company to repurchase its Class A Common Stock under approved repurchase programs. On February 3, 2016, the Board authorized the Company to repurchase up to $500.0 of its Class A Common Stock, and on November 13, 2023, the Board increased the Company’s share repurchase authorization by an additional $600.0 (the “Share Repurchase Program”). Repurchases may be made from time to time at the Company’s discretion, based on ongoing assessments of the capital needs of the business, the market price of its Class A Common Stock, and general market conditions. As of June 30, 2024, the Company has $796.8 remaining under the Share Repurchase Program.

In June 2022, December 2022, and November 2023, the Company entered into forward repurchase contracts (the “Forward” and together the “Forwards”) with three large financial institutions (“Counterparties”) to start hedging for potential $200.0, $196.0, and $294.0 share buyback programs in 2024, 2025, and 2026, respectively. In connection with the June 2022, December 2022, and November 2023 Forward transactions, the Company incurred certain execution fees of $2.0, $2.0, and $2.9, respectively, which were recognized as a premium to the forward price recorded at inception and amortized ratably over the contract periods.

In February 2024, the Company elected to physically settle the June 2022 Forward for a cash payment of $200.0 in exchange for 27.0 million shares of its Class A Common Stock. The fair value of the shares repurchased was approximately $350.6, which was recorded as an increase to Treasury stock in the Consolidated Balance Sheets and Consolidated Statements of Equity.

As part of the Forward agreements, the Company will pay interest on the outstanding underlying notional amount of the Forwards held by the Counterparties during the contract periods. The interest rates are variable, based on the United States secured overnight funding rate (“SOFR”) plus a spread. The weighted average interest rate plus applicable spread for the December 2022 and November 2023 Forward transactions were 9.8% and 8.2%, respectively, as of June 30, 2024.

As part of the December 2022 Forward transaction, two of the Counterparties purchased approximately 11.0 million shares of the Company’s Class A Common Stock. In addition, as part of the November 2023 Forward transaction, the Counterparties purchased 25.0 million shares of the Company’s Class A Common Stock. These Forward agreements require the Company to: (i) repurchase the shares on or before December 15, 2024 and December 31, 2025, respectively, at a price based on the weighted average of the daily volume weighted average price (“VWAP”) during the initial acquisition period (“Initial Price”); or (ii) at the Company’s option, pay or receive the difference between the Final Price, defined as the weighted average of the daily VWAP during the unwind period as defined in the agreement, and Initial Price of the Forwards.

As part of the December 2022 Forward transaction, the remaining Counterparty purchased approximately 11.5 million shares of the Company’s Class A Common Stock. This Forward requires the Company to pay or receive the difference between the Final Price and Initial Price established at inception of the Forward on or before January 15, 2025.

In addition, the Forwards include a provision for a potential true-up in cash upon specified changes in the price of the Company’s Class A Common Stock relative to the Initial Price (“Hedge Valuation Adjustment”). Such Hedge Valuation adjustment shall not result in a termination date or any adjustment of the number of Coty’s Class A Common Stock shares purchased by the Counterparties at inception.

In the event the Company declares and pays any cash dividends on its Class A Common Stock, the Forward Counterparties will be entitled to such dividend payments and payable at termination of the Forwards.

Since the Forwards permit a net cash settlement alternative in addition to the physical settlement, the Company accounted for the Forwards initially and subsequently at their fair value, with changes in the fair value recorded in Other expense (income), net in the Consolidated Statement of Operations.

The fair values of the Company’s Forwards were $(12.4) and $219.8 as of June 30, 2024 and 2023, respectively. The Forwards are valued principally based on the change in the quoted market price of the Company’s common stock price between the inception date and the end of the period. We classify these instruments as Level 2.

Accumulated Other Comprehensive (Loss) Income

			Foreign Currency Translation Adjustments
	(Losses) Gains on Cash Flow Hedges		(Losses) Gains on Net Investment Hedge		Foreign Currency Translation Adjustments		Pension and Other Post-Employment Benefit Plans		Total
Beginning balance at July 1, 2022	$	4.3	$	4.1	$	(770.8)	$	44.5	$	(717.9)
Other comprehensive income (loss) before reclassifications	1.7		(53.9)		102.9		14.7		65.4
Net amounts reclassified from AOCI/(L) (a)	(5.3)		—		—		(4.6)		(9.9)
Net current-period other comprehensive income (loss)	(3.6)		(53.9)		102.9		10.1		55.5
Ending balance at June 30, 2023	$	0.7	$	(49.8)	$	(667.9)	$	54.6	$	(662.4)
Other comprehensive income (loss) before reclassifications	1.2		26.8		(155.1)		(0.5)		(127.6)
Net amounts reclassified from AOCI/(L) (a)	0.2		—		—		(5.3)		(5.1)
Net current-period other comprehensive income (loss)	1.4		26.8		(155.1)		(5.8)		(132.7)
Ending balance at June 30, 2024	$	2.1	$	(23.0)	$	(823.0)	$	48.8	$	(795.1)

(a) Amortization of actuarial gains of $7.1 and $6.1, net of taxes of $1.8 and $1.5, were reclassified out of AOCI/(L) and included in the computation of net period pension costs for the fiscal years ended June 30, 2024 and 2023, respectively (see Note 18—Employee Benefit Plans).