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PRE-MKT · 04:35 ET
Market ClerkRecap
Mon Oct 26 · pre-market1 signal on Oct 2494 insider buys this week · $48.3MCIRO short report next: Oct 31The week ahead

COTY

COTY INC.
NYSE · CONSUMER STAPLES · PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS
3.23
+0.02 +0.62%
USD · close Oct 23
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nobody we score has called it yet
MKT CAP $2.8BP/E —DIV YIELD —FCF YIELD 12.24%REV TTM $5.8B −1.5%NET INCOME −$604.8MNET DEBT $3.8B52W 1.85 – 4.10SEC XBRL · TTM TO Invalid Date

How COTY rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026
Text kept
64%
of sentences unchanged
Added
123
new sentences
Dropped
96
sentences removed
Length
+1,422
words, now 20,455

New in FY2026

  • These disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future.
  • References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
  • Some of the factors that could materially and adversely affect our business, financial condition, results of operations or prospects include: • The beauty industry is highly competitive, and if we are unable to compete effectively, our business, prospects, financial condition and results of operations could suffer. • Further consolidation in the retail industry and shifting preferences in how and where consumers shop, including to e‑commerce, may adversely affect our business, prospects, financial condition and results of operations. • Changes in industry trends and consumer preferences could adversely affect our business, prospects, financial condition and results of operations. • Our new product introductions may not be as successful as we anticipate, which could have a material adverse effect on our business, prospects, financial condition and results of operations. • Our success depends, in part, on the quality, efficacy and safety of our products. • Our failure to protect our reputation, or the failure of our brand partners or licensors to protect their reputations, could have a material adverse effect on our brand images. • Our brand licenses may be terminated if specified conditions are not met, and we may not be able to renew expiring licenses on favorable terms or at all. • If we are unable to obtain, maintain and protect our intellectual property rights, in particular trademarks, patents and copyrights, or if our brand partners and licensors are unable to maintain and protect their intellectual property rights that we use in connection with our products, our ability to compete could be negatively impacted. • Our success depends on our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property of third parties. • Our business is subject to seasonal variability. • Our success depends on our ability to refine and achieve our global business strategies. • Potential divestitures, and any retained liabilities from such sold businesses, could negatively impact our business and financial results. • We have incurred significant costs in connection with the integration of acquisitions and simplifying our business, and expect to incur costs in connection with the implementation of our global business strategies, that could affect our period-to-period operating results. • We may not be able to identify suitable acquisition targets and our acquisition activities and other strategic transactions may present managerial, integration, operational and financial risks, which may prevent us from realizing the full intended benefit of the acquisitions we undertake. • We face risks associated with our joint ventures and strategic partnership investments. • Our goodwill and other assets have been subject to impairment and may continue to be subject to impairment in the future. • A disruption in our manufacturing, distribution, logistics or other operations could adversely affect our business. • Volatility in the cost or availability of raw materials, packaging, transportation and other inputs, or disruptions involving our suppliers, could adversely affect our business. • We outsource a number of functions to third-party service providers, and any failure to perform or other disruptions or delays at our third-party service providers could adversely impact our business, our results of operations or our financial condition. • Evolving supply chain diligence, sourcing, packaging and product-related requirements could increase our costs, restrict sales of our products or adversely affect our reputation. • We are increasingly dependent on information technology, and if we are unable to protect against service interruptions, corruption of our data and privacy protections, cyber-based attacks or network security breaches, our operations could be disrupted. • We must continue to maintain and make requisite or critical upgrades to our information technology systems, and our failure to do so could have a material adverse effect on our business, financial condition and results of operations. • Failure to protect sensitive information of our consumers and information technology systems against security breaches could damage our reputation and substantially harm our business, financial condition and results of operations. • Failure of or disruption to one or more of our information technology platforms could affect our ability to execute our operating strategy. • We use AI in our business, and challenges with properly governing, managing or monitoring its use could result in harm to our brands, reputation, business, operations or customers. • Our success depends, in part, on our employees, including our key personnel. • If we underestimate or overestimate demand for our products and do not maintain appropriate inventory levels, our net revenues or working capital could be negatively impacted. • We are subject to risks related to our international operations. • Additional tariffs or other restrictions placed on imports, retaliatory trade measures taken by other countries and resulting trade wars may have a material adverse impact on our financial condition and results of operations. • Changes in tax laws or regulations, or challenges to our tax positions, could significantly increase our tax liabilities. • We have taken on significant debt, and the agreements that govern such debt contain various covenants that impose restrictions on us, which may adversely affect our business. • Our ability to service and repay our indebtedness will be dependent on the cash flow generated by our subsidiaries and events beyond our control. • Our variable rate indebtedness subjects us to interest rate risk, which could cause certain debt service obligations to increase. • We must successfully manage the impact of a general economic downturn, credit constriction, uncertainty in global economic or political conditions or other global events or a sudden disruption in business conditions which may affect consumer spending, global supply chain conditions and inflationary pressures and adversely affect our financial results. • Price inflation for labor, materials and services, further exacerbated by volatility in energy and commodity markets by geopolitical events, could adversely affect our business, results of operations and financial condition. • Volatility in the financial markets could have a material adverse effect on our business, prospects, financial condition, results of operations, cash flows, as well as the trading price of our securities. • Fluctuations in currency exchange rates may negatively impact our financial condition and results of operations. • We are subject to legal proceedings and legal compliance risks, including talc-related litigation alleging bodily injury. • Changes in laws, regulations and policies that affect our business or products could adversely affect our business, financial condition, results of operations, cash flows, as well as the trading price of our securities. • Our operations and acquisitions in certain foreign areas expose us to political, regulatory, economic and reputational risks. • Our employees or others may engage in misconduct or other improper activities including noncompliance with regulatory standards and regulatory requirements. • Violations of our prohibition on harassment, sexual or otherwise, could result in liabilities and/or litigation. • If the Distribution (as defined below) or the acquisition of the P&G Beauty Business does not qualify for its intended tax treatment, in certain circumstances we are required to indemnify P&G for resulting tax-related losses under the tax matters agreement entered into in connection with the acquisition of the P&G Beauty Business dated October 1, 2016. • We are subject to risks related to our common stock and our stock repurchase program. • JAB Beauty B.V.
  • The beauty industry is highly competitive and can change rapidly due to consumer preferences and industry trends, such as the expansion of digital channels and advances in technology such as AI, direct-to-consumer channels, new “disruptor” trendy brands and celebrity and influencer-backed beauty companies that have garnered significant followings.
  • We must compete with a high volume of new product introductions and existing products by diverse companies across several different distribution channels.
  • The color cosmetics category has been influenced by entry by new competitors and smaller competitors that are fast to respond to trends and engage with their customers through digital platforms, including leveraging data analytics, AI and machine learning, and innovative in-store activations.
  • Significant consolidation in the retail industry has occurred during the last several years, including through reorganizations, restructurings, bankruptcies and ownership changes.
  • We have been and may continue to be negatively affected by changes in the policies or practices of our customers, such as inventory destocking, automated fulfillment requirements, AI-aided category pricing pressures and algorithms, limitations on access to shelf space (including the digital shelf), delisting of our products, or sustainability, supply chain or packaging standards or initiatives.
  • We may not be successful in adapting or effectively reacting to the rapidly changing retail landscape, changes in consumer behavior, preferences or purchasing patterns.
  • For example, we may incur costs exceeding our expectations, our advertising, promotional and marketing strategies may be less effective than planned or customer purchases or consumer sell-out may not be as high as anticipated, due to lack of acceptance of the products themselves, their price, or limited effectiveness of our marketing strategies.
  • For example, we entered into a strategic partnership with Kylie Jenner, a digital-native beauty business and we are continuing our expansion in prestige cosmetics.
  • Upon the expiration or termination of a license, we may be unable to negotiate favorable transition arrangements, and the agreed transition parameters may require significant coordination, resources and time to implement, including with respect to inventory, distribution, sell-off rights, operational support or separation activities.
  • Risks Related to our Business Strategy and Organization Our success depends on our ability to refine and achieve our global business strategies.
  • We continue to refine and implement our global business strategies, and our future performance and growth depends on the success of these strategies, including our management team’s ability to successfully implement them, including implementing our Coty.Curated framework, returning to market share growth, accelerating data-driven operations powered by AI, improving our advocacy capability and execution, continuing to deliver on our key sustainability priorities, while maintaining focus on deleveraging.
  • Refinement and implementation of our global business strategies may take longer than anticipated, and, once implemented, we may not realize, in full or in part, the anticipated benefits or such benefits may be realized more slowly than anticipated.
  • Potential divestitures, and any retained liabilities from such sold business, could negatively impact our business and financial results.
  • As previously announced, we are conducting an ongoing a strategic review process regarding our Company’s consumer beauty business, including its mass color cosmetics business and associated brands and the Company’s distinct Brazil business comprised of local Brazilian brands.
  • Our strategy also includes executing on our brand repositioning and continuing to focus our brand-building efforts on priority categories, channels and markets, including a focus on our fragrance expertise and profitable adjacent categories.
  • If and when we decide to divest or discontinue any brands or lines of business, we cannot be sure that we will be able to locate suitable buyers or that we will be able to complete such divestitures (including through strategic transactions or public offerings) or discontinuances successfully, timely, at appropriate valuations and on commercially advantageous terms (including with respect to retained liabilities), or without significant costs, including relating to any post-closing purchase price adjustments or claims for indemnification.
  • Divestitures or discontinuations (including as a result of the termination of licenses) involve significant challenges and risks, including the need to provide transition services, and the separation of operations, systems and personnel.
  • Any future divestitures and discontinuances could have a dilutive impact on our earnings, create dis-synergies, result in stranded costs, result in retained liabilities, structurally increase our leverage ratio through loss of earnings, reduce diversification across our brand portfolio and increase concentration risk in our remaining business, and divert significant financial, operational and managerial resources from our existing operations and make it more difficult to achieve our operating and strategic objectives.
  • We also cannot be sure of the effect such divestitures or discontinuances would have on the performance of our remaining business or the ability to execute our global business strategies, and we may not be successful in restructuring the remaining business to address such impacts.
  • For example, in connection with the early termination of the Gucci Beauty license, we are evaluating our central organization, manufacturing and asset base, and certain market structures to adjust our scope and size following the transition period.
  • If we are unable to successfully or timely achieve sufficient savings, core business acceleration and portfolio expansion, we may not be able to fully mitigate the impact of the license termination on our business and performance.
  • We have incurred significant restructuring costs in the past, and, as we continue to refine and implement our global business strategies, brand portfolio management and any future divestiture or restructuring initiatives, we expect to continue to incur one-time cash costs.
  • In the past, as we integrated acquisitions, including the transformational acquisition of the P&G Beauty Business, we experienced challenges, including supply chain disruptions, higher than expected costs and lost customers and related revenue and profits, and we could experience these or other challenges arising from the implementation of our global business strategies, brand portfolio management and any future divestiture or restructuring initiatives.
  • If our management is not able to effectively manage these initiatives, address fixed and other costs, if we incur additional operating expenses or capital expenditures to realize synergies, simplifications and cost savings, or if any significant business activities are interrupted as a result of these initiatives, our business, prospects, financial condition, results of operations, cash flows, as well as the trading price of our securities may be materially adversely affected.
  • In addition, the implementation of our global business strategies, any continuing or future restructuring initiatives, divestitures and brand portfolio management or the integration of future acquisitions may impact our ability to anticipate future business trends and accurately forecast future results.
  • In the past, we grew our business through significant acquisitions and strategic transactions, including the acquisition of the P&G Beauty Business in October 2016 and the joint venture with Kylie Jenner in fiscal 2020.
  • As we consider growth opportunities, we may seek acquisitions that we believe strengthen our competitive position in our key segments and geographies or accelerate our ability to grow into adjacent product categories and channels or which otherwise fit our strategy.
  • Our acquisition activities and other strategic transactions also expose us to certain risks related to integration, including diversion of management attention from existing core businesses and substantial investment of resources to support integration.
  • Acquisition activities may also result in slower progress toward environmental, social and governance goals given challenges with data acquisition and integration, the difficulty of accessing and disclosing sufficient environmental, social and governance data to comply with current and emerging regulations, and integration of environmental, social and governance initiatives overall.
  • In some cases, acquired businesses, brands or strategic investments may underperform our expectations, require additional investment or restructuring, or ultimately be divested on terms that do not allow us to recover our original investment.
  • For example, in fiscal 2025, we incurred impairment charges of $212.8, related to indefinite-lived intangible assets for certain trademarks within the Consumer Beauty Segment and for our Philosophy trademark within the Prestige Segment.
  • In fiscal 2026, we incurred $362.8 of asset impairment charges of which $237.1 related to goodwill within the Consumer Beauty segment, and $50.6, $48.5, $22.5, $4.1 related to the CoverGirl , Sally Hansen , Max Factor , and Bourjois trademarks, respectively, within the Consumer Beauty Segment.
  • For a further discussion of our impairment testing, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition-Liquidity and Capital Resources-Goodwill, Other Intangible Assets and Long-Lived Assets.” Risks related to our Business Operations A disruption in our manufacturing, distribution, logistics or other operations could adversely affect our business.
  • As a company engaged in manufacturing and distribution on a global scale, we are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes (including works council-related matters), disruptions in supply chain or information systems, loss or impairment of key manufacturing sites or distribution centers, product quality control, safety, licensing requirements and other regulatory issues, as well as natural disasters, pandemics or outbreaks of contagious diseases, border disputes, acts of terrorism, armed conflicts such as the war in Ukraine and the war in the Middle East and other geopolitical tensions, possible dawn raids, and other external factors over which we have no control.
  • For example, limited driver capacity, transportation delays or other logistics disruptions have impacted, and may impact in the future, our distribution centers and result in increased costs, including penalty payments to retailers for delayed product delivery.
  • Volatility in the cost or availability of raw materials, packaging, transportation and other inputs, or disruptions involving our suppliers, could adversely affect our business.
  • Inflationary pressures as well as global supply chain disruptions and geopolitical events have caused and may continue to cause significant volatility in the cost and availability of the raw materials and services (such as transportation) that we need to manufacture and distribute our products.

and 83 more.

Gone since FY2025

  • Some of the factors that could materially and adversely affect our business, financial condition, results of operations or prospects include: • The beauty industry is highly competitive, and if we are unable to compete effectively, our business, prospects, financial condition and results of operations could suffer. • Further consolidation in the retail industry and shifting preferences in how and where consumers shop, including to e‑commerce, may adversely affect our business, prospects, financial condition and results of operations. • Changes in industry trends and consumer preferences could adversely affect our business, prospects, financial condition and results of operations. • Our success depends, in part, on the quality, efficacy and safety of our products. • Our failure to protect our reputation, or the failure of our brand partners or licensors to protect their reputations, could have a material adverse effect on our brand images. • Our brand licenses may be terminated if specified conditions are not met, and we may not be able to renew expiring licenses on favorable terms or at all. • If we are unable to obtain, maintain and protect our intellectual property rights, in particular trademarks, patents and copyrights, or if our brand partners and licensors are unable to maintain and protect their intellectual property rights that we use in connection with our products, our ability to compete could be negatively impacted. • Our success depends on our ability to operate our business without infringing, misappropriating or otherwise violating the intellectual property of third parties. • Our business is subject to seasonal variability. • Our success depends on our ability to achieve our global business strategies. • We have incurred significant costs in connection with the integration of acquisitions and simplifying our business, and expect to incur costs in connection with the implementation of our global business strategies, that could affect our period-to-period operating results. • Our new product introductions may not be as successful as we anticipate, which could have a material adverse effect on our business, prospects, financial condition and results of operations. • We may not be able to identify suitable acquisition targets and our acquisition activities and other strategic transactions may present managerial, integration, operational and financial risks, which may prevent us from realizing the full intended benefit of the acquisitions we undertake. • We face risks associated with our joint ventures and strategic partnership investments. • Our goodwill and other assets have been subject to impairment and may continue to be subject to impairment in the future. • A disruption in operations could adversely affect our business. • We outsource a number of functions to third-party service providers, and any failure to perform or other disruptions or delays at our third-party service providers could adversely impact our business, our results of operations or our financial condition. • We are increasingly dependent on information technology, and if we are unable to protect against service interruptions, corruption of our data and privacy protections, cyber-based attacks or network security breaches, our operations could be disrupted. • We must continue to maintain and make requisite or critical upgrades to our information technology systems, and our failure to do so could have a material adverse effect on our business, financial condition and results of operations. • Failure to protect sensitive information of our consumers and information technology systems against security breaches could damage our reputation and substantially harm our business, financial condition and results of operations. • Failure of or disruption to one or more of our information technology platforms could affect our ability to execute our operating strategy. • We use AI in our business, and challenges with properly managing its use could result in harm to our brands, reputation, business or customers. • Our success depends, in part, on our employees, including our key personnel. • If we underestimate or overestimate demand for our products and do not maintain appropriate inventory levels, our net revenues or working capital could be negatively impacted. • We are subject to risks related to our international operations. • Additional tariffs or other restrictions placed on imports, retaliatory trade measures taken by other countries and resulting trade wars may have a material adverse impact on our financial condition and results of operations. • Changes in tax laws or regulations, or challenges to our tax positions, could significantly increase our tax liabilities. • We have taken on significant debt, and the agreements that govern such debt contain various covenants that impose restrictions on us, which may adversely affect our business. • Our ability to service and repay our indebtedness will be dependent on the cash flow generated by our subsidiaries and events beyond our control. • Our variable rate indebtedness subjects us to interest rate risk, which could cause certain debt service obligations to increase. • We must successfully manage the impact of a general economic downturn, credit constriction, uncertainty in global economic or political conditions or other global events or a sudden disruption in business conditions which may affect consumer spending, global supply chain conditions and inflationary pressures and adversely affect our financial results. • Price inflation for labor, materials and services, further exacerbated by volatility in energy and commodity markets by geopolitical events, could adversely affect our business, results of operations and financial condition. • Volatility in the financial markets could have a material adverse effect on our business, prospects, financial condition, results of operations, cash flows, as well as the trading price of our securities. • Fluctuations in currency exchange rates may negatively impact our financial condition and results of operations. • We are subject to legal proceedings and legal compliance risks, including talc-related litigation alleging bodily injury. • Changes in laws, regulations and policies that affect our business or products could adversely affect our business, financial condition, results of operations, cash flows, as well as the trading price of our securities. • Our operations and acquisitions in certain foreign areas expose us to political, regulatory, economic and reputational risks. • Our employees or others may engage in misconduct or other improper activities including noncompliance with regulatory standards and regulatory requirements. • Violations of our prohibition on harassment, sexual or otherwise, could result in liabilities and/or litigation. • If the Distribution (as defined below) or the acquisition of the P&G Beauty Business does not qualify for its intended tax treatment, in certain circumstances we are required to indemnify P&G for resulting tax-related losses under the tax matters agreement entered into in connection with the acquisition of the P&G Beauty Business dated October 1, 2016. • We are subject to risks related to our common stock and our stock repurchase program. • JAB Beauty B.V.
  • The beauty industry is highly competitive and can change rapidly due to consumer preferences and industry trends, such as the expansion of digital channels, direct-to-consumer channels, new “disruptor” trendy brands and advances in technology such as artificial intelligence (“AI”).
  • The color cosmetics category has been influenced by entry by new competitors and smaller competitors that are fast to respond to trends and engage with their customers through digital platforms, including using new or advancing technologies such as AI and data analytics and innovative in-store activations.
  • Significant consolidation in the retail industry has occurred during the last several years.
  • Risks Related to our Business Strategy and Organization Our success depends on our ability to achieve our global business strategies.
  • Our future performance and growth depends on the success of our global business strategies, including our management team’s ability to successfully implement them, including a focus on improving gross margin, deleveraging, and simplifying our business.
  • Implementation of our global business strategy may take longer than anticipated, and, once implemented, we may not realize, in full or in part, the anticipated benefits or such benefits may be realized more slowly than anticipated.
  • Our strategy includes executing on our brand repositioning and continuing to focus our brand-building efforts on priority categories, channels and markets.
  • If and when we decide to divest or discontinue any brands or lines of business, we cannot be sure that we will be able to locate suitable buyers or that we will be able to complete such divestitures (including through strategic transactions or public offerings) or discontinuances successfully, timely, at appropriate valuations and on commercially advantageous terms, or without significant costs, including relating to any post-closing purchase price adjustments or claims for indemnification.
  • Any future divestitures and discontinuances could have a dilutive impact on our earnings, create dis-synergies, and divert significant financial, operational and managerial resources from our existing operations and make it more difficult to achieve our operating and strategic objectives.
  • We also cannot be sure of the effect such divestitures or discontinuances would have on the performance of our remaining business or the ability to execute our global business strategies.
  • We have incurred significant restructuring costs in the past, and, as we continue to implement our global business strategies and any future restructuring initiatives, we expect to continue to incur one-time cash costs.
  • In the past, as we integrated acquisitions, including the transformational acquisition of the P&G Beauty Business, we experienced challenges, including supply chain disruptions, higher than expected costs and lost customers and related revenue and profits, and we could experience these or other challenges arising from the implementation of our global business strategies and any future restructuring initiatives.
  • If our management is not able to effectively manage these initiatives, address fixed and other costs, we incur additional operating expenses or capital expenditures to realize synergies, simplifications and cost savings, or if any significant business activities are interrupted as a result of these initiatives, our business, prospects, financial condition, results of operations, cash flows, as well as the trading price of our securities may be materially adversely affected.
  • In addition, the implementation of our global business strategies, any continuing or future restructuring initiatives and the integration of acquisitions may impact our ability to anticipate future business trends and accurately forecast future results.
  • The diversion of resources to the integration of the P&G Beauty Business, together with changes and turnover in our management teams as we reorganized our business, negatively impacted our fiscal 2018 and 2019 results.
  • The implementation of our global business strategies could result in similar challenges.
  • For example, as part of our global business strategies, we are instituting new objectives for our innovation efforts to support expansion of category coverage and sustainability.
  • For example, we may incur costs exceeding our expectations, our advertising, promotional and marketing strategies may be less effective than planned or customer purchases may not be as high as anticipated.
  • For example, we entered into a strategic partnership with Kylie Jenner, a digital-native beauty business; we are continuing our expansion in prestige cosmetics, and we are building a comprehensive skincare portfolio leveraging existing and new brands.
  • Our acquisition activities and other strategic transactions expose us to certain risks related to integration, including diversion of management attention from existing core businesses and substantial investment of resources to support integration.
  • In the past, we have explored and undertaken opportunities to acquire other companies and assets as part of our growth strategy.
  • For example, we completed five significant acquisitions in fiscal 2016 through fiscal 2018 (including the acquisition of the P&G Beauty Business in October 2016), and we entered into a joint venture with Kylie Jenner in fiscal 2020.
  • These assets represent a significant portion of our net assets, particularly the P&G Beauty Business.
  • As we consider growth opportunities, we may seek acquisitions that we believe strengthen our competitive position in our key segments and geographies or accelerate our ability to grow into adjacent product categories and channels and emerging markets or which otherwise fit our strategy.
  • For example, in fiscal 2022, we incurred impairment charges of $31.4, primarily related to impairments on indefinite-lived other intangible assets.
  • In the third quarter of fiscal 2025, we incurred impairment charges of $212.8, related to indefinite-lived intangible assets for certain trademarks within the Consumer Beauty Segment and for our Philosophy trademark within the Prestige Segment.
  • For a further discussion of our impairment testing, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition-Liquidity and Capital Resources-Goodwill, Other Intangible Assets and Long-Lived Assets.” Risks related to our Business Operations A disruption in operations could adversely affect our business.
  • As a company engaged in manufacturing and distribution on a global scale, we are subject to the risks inherent in such activities, including industrial accidents, environmental events, strikes and other labor disputes (including as to works councils), disruptions in supply chain or information systems, loss or impairment of key manufacturing sites or distribution centers, product quality control, safety, licensing requirements and other regulatory issues, as well as natural disasters, pandemics or outbreaks of contagious diseases, border disputes, acts of terrorism, armed conflicts such as the war in Ukraine and other geopolitical tensions, possible dawn raids, and other external factors over which we have no control.
  • For example, in fiscal 2022, limited driver capacity and transportation delays impacted our U.S. distribution centers resulting in increased costs, including penalty payments to retailers for delayed product delivery.
  • In fiscal 2023, inflationary pressures as well as global supply chain disruptions caused significant volatility in the cost and availability of the raw materials and services (such as transportation) that we need to manufacture and distribute our products.
  • In particular, increases in energy costs due to global geopolitical conditions, particularly in Europe, impacted the cost and availability of raw materials, including glass and glass components and certain resins.
  • In addition, failure by our third-party suppliers to comply with ethical, social, product, labor and environmental laws, regulations or standards, or their engagement in politically or socially controversial conduct, such as animal testing, could negatively impact our reputations and lead to various adverse consequences, including decreased sales and consumer boycotts.
  • We are also subject to reporting requirements under The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 regarding the use of certain minerals mined from the Democratic Republic of Congo and adjoining countries and procedures pertaining to a manufacturer’s efforts in identifying the source of such minerals.
  • SEC rules implementing these requirements may have the effect of reducing the pool of suppliers who may supply “conflict free” products, and we may not be able to obtain conflict free products or supplies in sufficient quantities for our operations.
  • Likewise, we have faced, and may continue to face, constraints in the availability of certain raw materials that align with our sustainability goals, including responsibly sourced palm oil, mica and recycled materials.
  • Since our supply chain is complex, we may face operational obstacles and reputational challenges with our customers and stockholders if we are unable to continue to sufficiently verify the origins for materials used in our products and packaging or if we are subject to additional supply chain diligence and disclosure regulations or other reporting obligations.
  • The above risks have been and may continue to be exacerbated by the impact of inflationary pressures, global supply chain disruptions on our business, and our efforts to manage and remedy these impacts to the Company may not achieve results in accordance with our expectations or on the timelines we anticipate.
  • For example, recent and future regulatory measures restricting or otherwise impacting the use of the web sites, mobile applications or social media platforms that we use in connection with our digital marketing and e-commerce activities could impact the development of our digital advocacy strategy.
  • The risks described here are heightened due to the increase in remote working and the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

and 56 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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