ToscaWhi/iStock Editorial via Getty Images Coty Inc. (NYSE:COTY) reported the company's Q4/FY2024 results on the 20th of August in post-market hours, showing a mildly disappointing growth in the quarter. Still, with a fairly good FY2025 outlook ahead and good underlying profitability expansion, Coty's good turnaround momentum isn't looking to stop yet. I previously wrote an article on the stock, titled "Coty: Valuation Needs More Caution Despite Great Turnaround". In the article, I initiated Coty at a Sell ...

FY24 Performance - Coty's LFL sales, adjusted EBITDA, and EPS experienced double-digit percentage growth[2] - Coty outperformed the global beauty market with an +11% LFL growth compared to the market's ~9% growth[3] - FY24 LFL results included a 1% contribution from the Argentina hyperinflationary environment[3, 5] Financial Results & FY25 Guidance - Strong revenue growth was observed, increasing from ~$4.6 billion in FY21 to ~$6.1 billion in FY24[5] - Adjusted gross margin increased by +50bps, and adjusted operating margin increased by +80bps[5] - Adjusted EBITDA grew significantly by +12% year-over-year[6] reaching $1,091 million in FY24[7] - Adjusted EPS (excluding the equity swap) grew strongly by +26% year-over-year[8] reaching $0.48 in FY24[8] - The company significantly reduced leverage, from ~4.7x in FY22 to ~3.3x in FY24, including ~$370 million in free cash flow in FY24[9] - FY25 guidance includes revenue LFL in line with a medium-term target of +6-8% LFL, and adjusted EBITDA growth of +9-11% to $1,186-1,208 million[10] Growth Drivers - E-commerce grew by ~20% LFL year-over-year and represents ~20% of the FY24 revenue mix[15] - Travel retail experienced +21% LFL growth and represents 9% of the FY24 revenue mix[16, 18] - Growth engine markets grew by +17% LFL in FY24 and represent ~22% of Coty's sales[16, 30]

Financial Data and Key Metrics Changes - Coty Inc. reported a strong fiscal year 2024 with an 11% like-for-like revenue growth, outperforming the beauty market which grew approximately 9% [6][8] - Adjusted EBITDA for fiscal 2024 grew 12% year-over-year to $1,091 million, exceeding guidance [10] - Adjusted EPS excluding the swap totaled $0.48, reflecting a 26% year-over-year increase, driven by higher EBITDA and a discrete tax benefit [11] Business Line Data and Key Metrics Changes - The adjusted operating margin in the Prestige division reached 19%, up 40 basis points year-on-year, while Consumer Beauty's adjusted operating margin increased to 5.7%, up 80 basis points [10] - Coty achieved double-digit growth in like-for-like sales, adjusted EBITDA, and adjusted EPS for the third consecutive year [5] Market Data and Key Metrics Changes - Sales in growth engine markets, including Brazil and Mexico, accounted for 22% of total sales, growing approximately 17% like-for-like in fiscal 2024 [20][34] - E-commerce sales grew by approximately 20%, increasing its penetration to about 20% of overall business [29] Company Strategy and Development Direction - Coty aims to maintain high levels of investment in marketing, targeting 6% to 8% like-for-like revenue growth and 9% to 11% adjusted EBITDA growth in fiscal 2025 [5][13] - The company is focusing on a balanced growth model, capturing demand across various price points and markets, while leveraging its fragrance expertise [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Coty's ability to grow and outperform despite macroeconomic challenges, supported by a strong innovation pipeline and robust commercial plans [35][37] - The outlook for fiscal 2025 includes expectations for continued gross margin expansion and double-digit revenue growth in growth engine markets [36] Other Important Information - Coty ended fiscal 2024 with net debt of approximately $3.6 billion, down from previous years, and aims to reduce leverage further [12] - The transition to SAP S/4HANA was completed successfully, enhancing operational efficiency [12] Q&A Session Summary - No specific questions or answers were provided in the transcript, indicating the end of the Q&A session without detailed interactions [37]

Core Insights - Coty reported revenue of $1.36 billion for the quarter ended June 2024, a year-over-year increase of 0.9%, but fell short of the Zacks Consensus Estimate of $1.38 billion, resulting in a surprise of -0.94% [1] - The company experienced an EPS of -$0.03, compared to $0.01 a year ago, reflecting an EPS surprise of -175.00% against a consensus estimate of $0.04 [1] Revenue Performance - Geographic Revenues in the Americas reached $583 million, slightly above the average estimate of $580.62 million, marking a year-over-year increase of +2.7% [3] - Geographic Revenues in Asia Pacific were reported at $182.30 million, below the average estimate of $192.73 million, indicating a year-over-year decline of -3.8% [4] - Geographic Revenues in EMEA totaled $598.10 million, slightly exceeding the average estimate of $597.78 million, with a year-over-year change of +0.7% [5] Segment Performance - Net Revenues from Prestige amounted to $802.80 million, below the average estimate of $809.77 million, reflecting a year-over-year increase of +0.4% [6] - Net Revenues from Consumer Beauty were reported at $560.60 million, slightly below the average estimate of $566.50 million, showing a year-over-year increase of +1.6% [7] Operating Income - Adjusted Operating Income for Consumer Beauty was $20.20 million, below the average estimate of $25.73 million [8] - Adjusted Operating Income for Prestige reached $87.80 million, surpassing the average estimate of $78.33 million [9] - Corporate Operating Loss was reported at -$25.30 million, significantly better than the average estimate of -$72.39 million [10] Stock Performance - Coty's shares have returned -4.1% over the past month, contrasting with the Zacks S&P 500 composite's +1.9% change, and the stock currently holds a Zacks Rank 3 (Hold) [11]

Coty (COTY) came out with a quarterly loss of $0.03 per share versus the Zacks Consensus Estimate of $0.04. This compares to earnings of $0.01 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -175%. A quarter ago, it was expected that this beauty products company would post earnings of $0.06 per share when it actually produced earnings of $0.05, delivering a surprise of -16.67%. Over the last four quarters, the company has sur ...

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Coty Reports Double-Digit Growth in FY24, Outpacing Beauty Market Strong Revenue Growth Across Prestige and Consumer Beauty in FY24 Solid Gross Margin Expansion Supported by Multi-Lever Strategy FY25 Guidance In-line with Medium-Term Targets, Including Expected Sequential Growth Improvement in Q1 and 1H25 NEW YORK - August 20, 2024-- Coty Inc. (NYSE: COTY) (Paris: COTY) ("Coty" or "the Company") today announced its results for the full fiscal year 2024 and the fourth quarter, ended June 30, 2024. The Compan ...

Coty Inc. (COTY) is likely to register top- and bottom-line growth when it reports fourth-quarter fiscal 2024 earnings on Aug 20. The Zacks Consensus Estimate for revenues is pegged at $1.4 billion, suggesting an increase of 1.8% from the prior-year quarter's reported figure. The consensus mark for COTY's fiscal 2024 revenues is pegged at $6.1 billion, indicating a 10.4% increase from the year-ago period's reported figure. Although the Zacks Consensus Estimate for quarterly earnings has moved down by a penn ...

Core Insights - Analysts expect Coty (COTY) to report quarterly earnings of $0.04 per share, reflecting a year-over-year increase of 300% [1] - Projected revenues for Coty are anticipated to be $1.38 billion, which represents a 1.8% increase from the same quarter last year [1] Earnings Projections - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a collective reevaluation by analysts [1][2] - Revisions to earnings projections are crucial for predicting investor behavior and short-term stock performance [2] Revenue Estimates - Analysts project 'Net Revenues- Prestige' to reach $809.77 million, indicating a 1.3% increase year-over-year [4] - 'Net Revenues- Consumer Beauty' is expected to be $566.50 million, reflecting a 2.6% increase from the prior year [4] - 'Geographic Revenues- Americas' are estimated at $580.62 million, suggesting a 2.2% year-over-year change [4] - 'Geographic Revenues- Asia Pacific' is forecasted to be $192.73 million, with a year-over-year change of 1.7% [5] - 'Geographic Revenues- EMEA' is expected to reach $597.78 million, indicating a 0.6% increase from the previous year [5] Operating Income Estimates - The consensus for 'Adjusted Operating Income (Loss)- Consumer Beauty' stands at $25.73 million, compared to $20 million from the previous year [5] - 'Adjusted Operating Income (Loss)- Prestige' is projected to be $78.33 million, down from $85.10 million year-over-year [6] Stock Performance - Coty shares have decreased by 10.1% over the past month, contrasting with the Zacks S&P 500 composite's decline of 2.9% [6] - Coty holds a Zacks Rank 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [6]

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