Coty Inc. (COTY) posted first-quarter fiscal 2025 results, with the top and bottom lines increasing year over year but missing the Zacks Consensus Estimate. The macroeconomic environment remains challenging, with the exceptional beauty market growth of recent years transitioning into a more normalized phase. However, consumers prioritize beauty spending, with fragrances remaining a top-performing category in the beauty industry. While Coty faces headwinds in markets like the Chinese mainland, Asia Travel Re ...

Financial Data and Key Metrics Changes - The first quarter net revenue grew 4.5% like-for-like, supported by solid growth in prestige fragrance, mass fragrance, and mass skin care, following an 18% like-for-like growth in the same quarter last year [20][36] - Adjusted gross margin increased by 200 basis points to 65.5%, driven by premiumization, pricing actions, and supply chain productivity [20][41] - Adjusted EBITDA was roughly flat year-over-year at $360 million, impacted by lower order patterns and strategic investments [22][41] - Adjusted diluted EPS excluding the equity swap was $0.18, reflecting a 20% year-over-year growth [22][41] - Free cash flow was slightly negative compared to over $100 million generated in Q1 of the previous year, due to tight order and inventory management [25][41] - Net debt at the end of Q1 was approximately $3.7 billion, with leverage at 3.4 times, down significantly from a year ago [26][41] Business Line Data and Key Metrics Changes - Prestige fragrances reported 7% like-for-like growth, with strong performance in the category [17][19] - Consumer beauty growth was flat, impacted by slightly negative volumes and inventory reductions in the U.S. mass channel [17][19] - Mass fragrances grew by over 20% in the quarter, contributing positively to the consumer beauty operating margin [51][59] - The mass color cosmetics segment showed flattish to slightly negative performance, particularly in the U.S. [12][19] Market Data and Key Metrics Changes - EMEA region saw high single-digit growth, while the Americas experienced mid-single-digit growth, and APAC faced a single-digit decline due to pressures in China [18][19] - Growth engine markets, accounting for approximately 21% of Q1 sales, grew strongly at 15% like-for-like [18][19] - Travel retail channel, which accounts for roughly 9% of Q1 sales, grew 4% like-for-like, driven by growth in the Americas and EMEA [19][59] Company Strategy and Development Direction - The company aims to adapt for future success in a dynamic market environment, with a focus on cost savings and operational efficiency [8][27] - Strategic initiatives include establishing centers of excellence, adapting the commercial organization for omnichannel, and maximizing benefits from emerging technologies and AI [29][32] - The company is committed to reducing share count and deleveraging towards targeted levels, with plans for active share buyback activity post-divestiture of Wella [24][41] Management's Comments on Operating Environment and Future Outlook - The beauty market is normalizing to a steadier growth level, with expectations of 3% to 4% like-for-like growth in the first half of fiscal 2025 [36][65] - The company anticipates continued gross margin expansion and EBITDA growth in the low to mid-single digits for the first half [36][41] - Management remains confident in the beauty industry's growth and Coty's ability to outperform, driven by robust fragrance category performance and expansion in under-indexed categories [66][68] Other Important Information - The company achieved significant ESG milestones, including a 65% reduction in Scope 3 air freight emissions compared to 2019 and a commitment to reduce water withdrawal by 25% by 2030 [61][62] - The company has met or surpassed its financial goals set three years ago, with significant improvements in gross margin and EBITDA margins [63][64] Q&A Session Summary Question: What is the outlook for the beauty market and Coty's performance? - The beauty market is expected to grow in the 3% to 4% range, with Coty anticipated to perform in line with this level despite disruptions in several markets [65][66] Question: How is Coty addressing the challenges in the U.S. market? - The company is adapting its strategies to manage inventory levels and respond to changes in consumer demand, particularly in the mass beauty segment [12][19][36]

Coty (COTY) reported $1.67 billion in revenue for the quarter ended September 2024, representing a year-over-year increase of 1.8%. EPS of $0.15 for the same period compares to $0.09 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $1.68 billion, representing a surprise of -0.33%. The company delivered an EPS surprise of -21.05%, with the consensus EPS estimate being $0.19.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ...

Coty (COTY) came out with quarterly earnings of $0.15 per share, missing the Zacks Consensus Estimate of $0.19 per share. This compares to earnings of $0.09 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -21.05%. A quarter ago, it was expected that this beauty products company would post earnings of $0.04 per share when it actually produced a loss of $0.03, delivering a surprise of -175%.Over the last four quarters, the compa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 001-35964 COTY INC. (Exact name of registrant as specified in its charter) Delaware 13-3823358 (State or other jurisdiction of i ...

Financial Performance - Coty reported Q1 net revenues of $1,671.5 million, reflecting a 2% increase on a reported basis and a 4.5% increase on a like-for-like (LFL) basis[24]. - Reported operating income was $237.8 million, up 20% year-over-year, resulting in an operating margin of 14.2%[7]. - Adjusted net income increased to $128.1 million, a 73% rise year-over-year, with an adjusted net income margin of 7.7%[8]. - Total net revenues for the first quarter of fiscal 2025 were $1,671.5 million, representing a 2% increase compared to $1,641.4 million in the prior year[64]. - Adjusted operating income for the total company was $303.6 million, reflecting a 1% increase year-over-year[64]. - Adjusted EBITDA for the total company was $360.1 million, slightly down from $360.3 million in the previous year[65]. - Net income attributable to Coty Inc. was $82.9 million, significantly up from $1.6 million in the prior year, with a net income margin of 5.4%[69]. - Adjusted EBITDA for the twelve months ended September 30, 2024, reached $1,090.9 million, reflecting a significant increase in operational performance[88]. Segment Performance - The prestige fragrance segment saw a reported revenue increase of 5%, with LFL growth of 7%, driven by strong performance in the fragrance category[3]. - Consumer Beauty net revenues declined by 3% on a reported basis, with LFL revenues flat year-over-year, impacted by a 3% headwind from foreign exchange[4]. - Prestige segment net revenues reached $1,114.1 million, a 5% increase on a reported basis, with a 7% increase on a like-for-like basis[38]. - Consumer Beauty segment net revenues were $557.4 million, down 3% as reported, with flat performance on a like-for-like basis[41]. - The Consumer Beauty segment reported a significant decline in operating income, down 56% to $14.0 million from $32.0 million in the prior year[76]. Gross Margin and Operating Income - Gross margin expanded to 65.5%, an increase of 200 basis points year-over-year, supported by premiumization and pricing actions[6]. - 1Q25 reported gross margin improved by 200 basis points to 65.5%, driven by premiumization, pricing actions, and supply chain savings[31]. - The adjusted operating income margin for the total company was 18%[64]. - The adjusted operating income margin improved to 25.1% in Q3 2024, up from 24.4% in Q3 2023[75]. Cash Flow and Debt - FY25 free cash flow is anticipated to grow by a double-digit percentage YoY, targeting the low to mid $400 million range[27]. - Net cash provided by operating activities decreased to $67.4 million in Q3 2024, down from $186.2 million in Q3 2023[85]. - Total debt as of September 30, 2024, was $4,002.2 million, with financial net debt at $3,718.6 million after accounting for cash and cash equivalents[86]. - Cash and cash equivalents decreased to $283.6 million as of September 30, 2024, down from $300.8 million[96]. Strategic Initiatives - Coty aims for close to double-digit growth in adjusted EBITDA for FY25, supported by ongoing strategic initiatives and operational adaptations[20]. - The company launched its first Scientific Advisory Board to enhance R&D and innovation efforts[47]. - Coty Inc. reported a significant focus on strategic transformation to stabilize consumer beauty brands and enhance innovation, aiming for revenue growth and cost control[51]. - The company is exploring strategic transactions, including potential divestitures and acquisitions, to enhance its operational efficiency[52]. - Coty is investing in new product launches and rebranding efforts, particularly in its skincare and prestige cosmetics portfolios[52]. Market and Economic Conditions - The company continues to expand its footprint in growth engine markets, which accounted for approximately 21% of total sales in Q1, with strong LFL growth[15]. - Americas net revenues decreased 2% to $693.5 million, impacted by a 5% negative FX effect, but LFL revenues increased by 4%[45]. - Coty anticipates ongoing inflationary pressures and plans to implement pricing actions to mitigate increased costs[51]. - The company faces risks related to geopolitical uncertainties, including the impact of the war in Ukraine and conflicts in the Middle East on its operations[53]. Sustainability Efforts - Coty has made significant progress on its sustainability agenda, achieving a 65% reduction in Scope 3 air freight emissions compared to the 2019 baseline[16]. - The company is committed to sustainability initiatives and aims to establish itself as an industry leader in this area[51]. - Coty is addressing climate change concerns through the implementation of new technologies and processes[53].

Companies in the Zacks Cosmetics industry are facing challenges due to a tough consumer environment, with inflationary pressures causing consumers to become more selective in their spending habits. As a result, many beauty industry players are experiencing a decline in consumer demand. In addition, companies in the cosmetics sector are grappling with escalated production costs, further impacting their profitability and operational efficiency.Despite these challenges, companies like Coty Inc. (COTY) , Helen ...

Coty Inc. (COTY) , a major player in the global beauty industry, shared its preliminary results for the first quarter of fiscal 2025, reiterating its optimistic adjusted EBITDA growth forecast. The company is ramping up its cost-reduction efforts across all areas to enhance savings. The global beauty market has shown solid growth, yet the growth rates have dipped slightly. The prestige fragrance segment is thriving, driven by increases in both volume and pricing strategies. In contrast, the mass beauty cate ...

Coty, Inc. (COTY) is leveraging strong brand recognition and favorable conditions in the global beauty market to drive impressive growth. The company's strategic focus on core categories such as skincare, fragrances and cosmetics allowed it to meet evolving consumer preferences while expanding its e-commerce capabilities. Despite rising costs and currency fluctuations, Coty is committed to innovation and strategic partnerships, positioning itself for long-term success. Let's delve deeper. Coty's Strong Fina ...

Coty Inc. (COTY) capitalized on its strong brand presence in fragrances, cosmetics and skincare. It continue s to thrive in the booming global beauty market despite some headwinds. The focus on expanding its consumer beauty and fragrance segments, coupled with a commitment to innovation and sustainability, positions COTY to benefit from growing consumer demand. In a backdrop where the beauty sector is integral to personal well-being, Coty benefits from a resilient consumer base. Consumers are not only gravi ...