Question under Investigation: Whether Coty concealed inventory concerns by overloading retailers? -- Hagens Berman Investigation
Investigation Launched: Hagens Berman Probes Coty Inc. Over Potential Securities Fraud
Hagens Berman, a global plaintiffs' rights complex litigation firm focusing on corporate accountability, has launched an investigation into Coty Inc. (NYSE: COTY). The investigation follows a 21% drop in the company's stock price on August 21, 2025, and alleges that Coty may have misled investors about its growth trajectory and the success of its digital inventory strategy, SAP S/4HANA.
The investigation is centred around concerns that Coty and its executives may have made material misrepresentations about the company's true financial condition. Specifically, Hagens Berman is investigating whether Coty has been engaging in an undisclosed sales practice of shipping excess inventory to its retail partners to mask its own inventory buildup and meet its earnings expectations.
This alleged practice, if true, 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 drop in Coty's stock price occurred after the company disclosed 'retailer inventory destocking issues' alongside weak Q4 and full-year financial results.
The firm's partner, Reed Kathrein, is leading the investigation. In a statement, Kathrein questioned whether Coty's management intentionally downplayed inventory problems to present an overly optimistic picture to the market. Kathrein has a track record of representing investors as well as whistleblowers, workers, consumers, and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings.
Persons with knowledge who may be able to assist in the investigation are encouraged to contact Hagens Berman's attorneys. Whistleblowers with non-public information regarding Coty are also encouraged to consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the SEC Whistleblower 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 about Hagens Berman and its successes, visit hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. Investors who suffered significant losses from Coty are urged to submit their losses by Hagens Berman.
As the investigation continues, Hagens Berman is committed to holding companies accountable for their actions and seeking justice for affected parties.
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