Coty Inc. (NYSE:COTY) is one of the 13 Best American Penny Stocks to Invest In. On February 9, Morgan Stanley reduced its price target on Coty Inc. (NYSE:COTY) from $4.25 to $3.50 and kept an Equal Weight rating on the stock. This update came after the company reported Q2 results, which Morgan Stanley noted were slightly below plan. The company’s Q3 EBITDA guidance was well below consensus estimates. Morgan Stanley pointed out that “the key negative” was the withdrawal of the fiscal 2026 guidance. The res ...

PresentationUnknown Analyst Good morning. It's my pleasure to welcome L'Oreal back to CAGNY. L'Oreal has one of the leading brand portfolios in global beauty, covering all facets of beauty, including color cosmetics, skin, hair and fragrance operating across the luxury, mass, dermatology and professional channels. L'Oreal operates 40 global brands, which are sold in 150 countries, generating EUR 44 billion in sales. In 2025, the company delivered strong financial performance despite the volatile environmen ...

Summary of L'Oréal 2026 Conference Call Company Overview - **Company**: L'Oréal (OTCPK:LRLC.F) - **Industry**: Global beauty - **Sales**: EUR 44 billion in 2025 - **Profit**: EUR 6.4 billion - **Units Sold**: 7 billion globally - **Employees**: 95,000 - **Market Cap**: Approximately EUR 200 billion - **Brand Portfolio**: 40 global brands sold in 150 countries [1][3][4] Core Financial Performance - **2025 Performance**: Strong financial results despite geopolitical challenges, with L'Oréal outperforming the beauty market, which grew around 3.5% [4][10] - **Growth Rate**: L'Oréal achieved a global growth rate of +4% in 2025, with notable acceleration in the second half of the year [4][10] - **Divisional Growth**: - Mass market (consumer products): +3.5% - Luxury: Slower growth - Dermatological beauty: Fastest-growing division, accelerated in the second half - Professional products: +7.5% [6][10] Market Dynamics - **Emerging Markets**: Close to +10% growth, with Southeast Asia at +11% and Latin America at +8% [9] - **US Market**: Accelerated growth from +2% in the first half to +4% in the second half [10] - **China Market**: Positive growth returning, with +1% in the first half and +5% in the second half [10] E-commerce and Innovation - **E-commerce Growth**: Represents 30% of sales, up from 5% a decade ago, growing at 13% [12][13] - **Investment in Technology**: Record investment of EUR 1.5 billion in technology, including AI and R&D [17] - **Innovation Rate**: Increased by 150 basis points, with 725 patents filed in 2025, marking a record year for innovation [22][23] Acquisitions and Strategic Moves - **Major Acquisitions**: - Kering Beauty, including high-end brands like Creed and licenses for Bottega Veneta and Balenciaga [24] - Medik8 and Color Wow, enhancing skincare and styling capabilities [24] - Increased stake in Galderma from 10% to 20% [25][26] Sustainability and Ethical Leadership - **Sustainability Recognition**: Received a triple A rating from CDP for the 10th consecutive year, emphasizing L'Oréal's commitment to sustainability [16] Future Outlook - **Market Growth Potential**: Targeting 2 billion consumers over the next decade, with a focus on emerging middle classes and younger demographics [28][29] - **Diversity in Beauty**: Addressing diverse consumer needs, including different hair types and skin tones, to capture new market segments [30] - **Skincare Ambitions**: Plans to enhance skincare offerings, leveraging acquisitions and innovations to meet growing consumer demand [38][39] US Market Insights - **US Subsidiary Performance**: Accounts for 27% of group turnover, with consistent growth and a strong local production footprint [44][45] - **Market Share**: L'Oréal holds a 13% share in the US beauty market, significantly outperforming competitors [50] - **Consumer Segmentation**: Targeting diverse demographics, including Gen Z, millennials, and older consumers, with tailored brand strategies [56][58] Conclusion - L'Oréal is positioned for continued growth through innovation, strategic acquisitions, and a strong focus on e-commerce and sustainability, with a robust outlook for the beauty market in the coming years [41][42]

Coty Inc. (NYSE:COTY) is one of the best luxury stocks to buy now. Berenberg cut the price target on Coty Inc. (NYSE:COTY) to EUR 2.55 from EUR 3.62 on February 12 while maintaining a Hold rating on the shares. RBC Capital also cut the price target on the stock to $8 from $10 on February 9, maintaining an Outperform rating and telling investors that the company delivered a beat on organic sales this quarter. It added that the present marks a transitional moment for Coty Inc. (NYSE:COTY), with Markus Strobe ...

With a market cap of $30.6 billion, Ulta Beauty, Inc. (ULTA) is a specialty beauty retailer offering a wide range of branded and private-label products across cosmetics, fragrance, haircare, skincare, and bath and body, along with in-store beauty services such as hair, makeup, brow, and skin treatments. It operates across the United States, Mexico, and Kuwait through its stores, digital platforms, and mobile applications. Shares of the beauty products retailer have surpassed the broader market over the p ...

Lakeside Shopping Centre has announced that Hollister, a global retailer and brand of Abercrombie & Fitch Co., will open at the super regional retail and leisure destination in 2026, bringing the brand’s latest offerings to the evolving shopping centre.The new Hollister store will bring the brand’s quality apparel, accessories and fragrance made for capturing moments, creating memories and being unapologetically you to Lakeside.Lakeside is redefining the retail experience for its guests through a future-fac ...

Price Target Adjustments - RBC Capital lowered its price target on Coty Inc. to $8 from $10 while maintaining an Outperform rating, citing an organic sales beat for the quarter and a transition period under new leadership [1] - Morgan Stanley reduced its price target to $3.50 from $4.25, keeping an Equal Weight rating, noting second-quarter results were slightly below target and expressing concern over third-quarter EBITDA guidance and the withdrawal of fiscal 2026 guidance [2] - Citi lowered its price target to $3 from $3.50 and maintained a Neutral rating, viewing the earnings report as mixed and highlighting uncertainty following the pulled fiscal 2026 outlook [2] Financial Performance - Coty reported second-quarter revenue of $1.68 billion, exceeding the consensus estimate of $1.66 billion [3] - The Executive Chairman and Interim CEO, Markus Strobel, acknowledged disappointing financial performance over the past year and a half, indicating that the current share price reflects this reality [3] Company Overview - Coty Inc. manufactures, markets, and sells branded beauty products globally through its Prestige and Consumer Beauty segments, offering fragrance, cosmetics, and skin and body care products [4]

Core Insights - L'Oréal is focusing on innovation in skin care and aims to bridge health and beauty, with a strong emphasis on longevity science as a growth opportunity [1][6][20] - The company's skin care segment, despite being its largest category at 16.4 billion euros, showed minimal growth of 0.4% year-on-year, contrasting with stronger growth in makeup and hair care [2][5] - E-commerce has become a significant growth driver for L'Oréal, with sales reaching 13 billion euros, accounting for over 30% of total group sales, marking a substantial increase from previous years [9][11] Skin Care Performance - Skin care sales were flat in 2025, which is a concern for L'Oréal as it represents a major category [2] - The company is adjusting its strategies to enhance performance in skin care, particularly through innovation and media engagement [1][5] Regional Performance - North Asia's sales declined by 5% on a reported basis, despite a slight gain in like-for-like terms [4] - The travel retail market in Asia has been soft, particularly in Korea and mainland China, impacting overall sales [3][5] Strategic Partnerships and Acquisitions - L'Oréal announced a strategic partnership with Kering, acquiring the House of Creed and gaining exclusive licenses for Gucci, Bottega Veneta, and Balenciaga, valued at 4 billion euros [12][13] - The acquisition of a larger stake in Galderma will enhance L'Oréal's involvement in dermatology and aesthetics, allowing for better integration of strategies [18][19] Future Growth Opportunities - The company sees significant potential in the longevity market, with plans to introduce supplements and advanced beauty protocols [7][20] - L'Oréal aims to reach 2 billion consumers in the next decade, driven by trends in emerging markets and changing consumer behaviors [21]

Financial Data and Key Metrics Changes - The company reported total sales of $943 million for Q1 fiscal 2026, reflecting a 0.6% increase year-over-year, with comparable sales flat compared to the previous year [4][19] - Adjusted diluted earnings per share increased by 12% to $0.48, exceeding guidance [4][21] - Gross margins improved to 51.3%, up 50 basis points year-over-year, primarily due to higher product margins [20][21] - Cash flow from operations was strong at $93 million, with free cash flow at $57 million [5][23] Business Line Data and Key Metrics Changes - In the Sally segment, net sales increased by 1.2% to $532 million, with comparable sales essentially flat [21][22] - The core color category in the Sally segment grew by 8%, while care declined by 6% [22] - The BSG segment saw net sales decrease by 0.2%, with comparable sales also flat [22][23] - E-commerce sales for Sally grew by 20% to $50 million, representing 9% of segment net sales [22] Market Data and Key Metrics Changes - The Sally U.S. and Canada business delivered positive comparable sales growth of 1.3% for the quarter [5] - Global e-commerce sales increased by 11% to $111 million, accounting for 12% of total net sales [20] - The company exited most lower-margin full-service operations in Europe, which is expected to result in a modest sales headwind of approximately $10 million for the full year [6] Company Strategy and Development Direction - The company is focused on four key growth drivers: understanding and activating the customer, unlocking digital value, differentiating with product assortment and innovation, and accelerating new growth pathways [9][14] - The "Save While You Skip the Salon" campaign is aimed at customer acquisition and retention, particularly among millennials and Gen Z [9][10] - The company is expanding its fragrance category, with plans to have fragrance in 2,000 stores by the end of the second quarter [7][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the customer base despite macroeconomic challenges, noting a rebound in performance following government shutdowns [5][30] - The company anticipates a strong Q2, with guidance for consolidated net sales between $895 million and $905 million, reflecting a favorable comparison to the previous year's weaker quarter [25][44] - Management remains cautious but optimistic about the second half of fiscal 2026, expecting continued momentum from new initiatives and customer engagement strategies [58] Other Important Information - The company is on track to capture approximately $45 million in benefits from its Fuel for Growth program in fiscal 2026, contributing to cumulative savings of $120 million by year-end [18][21] - The company ended the quarter with $157 million in cash and cash equivalents, with no outstanding borrowings [23] Q&A Session Summary Question: Comparison of BSG and Sally customers and trends - Management noted that BSG customers are more value-focused, with a cautious approach to spending on add-on services, while Sally customers showed resilience and positive growth in color sales [29][30] Question: Promotional environment and expectations - Management indicated that promotional levels were slightly up year-over-year, but gross margins remained strong, and they do not expect a highly promotional period in Q2 [38][39] Question: Customer demographics for fragrance - Initially, fragrance customers are primarily existing customers, with plans to expand marketing efforts as the product line grows [40] Question: Q2 outlook context - Management highlighted that Q2 is expected to benefit from easier comparisons to last year's weak quarter, with positive momentum in both segments [42][44] Question: Category growth expectations - Management remains optimistic about color category growth, while care has been softer; new categories like skin and spa are seen as significant opportunities [52]

Financial Data and Key Metrics Changes - The company reported total sales of $943 million for Q1 fiscal 2026, reflecting a 0.6% increase year-over-year, with comparable sales flat compared to last year [4][19] - Adjusted diluted earnings per share increased by 12% to $0.48, exceeding guidance [4][21] - Gross margins improved to 51%, with adjusted gross margin expanding by 50 basis points [4][20] Business Line Data and Key Metrics Changes - In the Sally segment, net sales increased by 1.2% to $532 million, with comparable sales essentially flat [21][22] - The core color category in the Sally segment grew by 8%, while care declined by 6% [6][22] - The BSG segment's net sales totaled $412 million, with comparable sales also flat, down 20 basis points [22][23] Market Data and Key Metrics Changes - Global e-commerce sales increased by 11% to $111 million, representing 12% of total net sales [20] - Sally's e-commerce sales grew by 20% to $50 million, while BSG's e-commerce sales increased by 4% to $60 million [22][23] Company Strategy and Development Direction - The company is focusing on four key growth drivers: understanding and activating the customer, unlocking digital value, differentiating with product assortment and innovation, and accelerating new growth pathways [9][12][14][15] - The "Save While You Skip the Salon" campaign is aimed at customer acquisition and retention, particularly among millennials and Gen Z [9][10] - The company is expanding into the fragrance category, with plans to increase presence in 2,000 stores [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the customer base despite macroeconomic challenges, noting a rebound in spending in December [5][31] - The company anticipates a strong Q2, with guidance for consolidated net sales between $895 million and $905 million, and comparable sales expected to increase by 0.5% to 1.5% [24][26] - Management remains cautious about macroeconomic factors but is optimistic about the potential for growth in new categories [58][59] Other Important Information - The company exited most lower-margin full-service operations in Europe, which is expected to simplify operations and focus resources on core businesses [5][6] - The Fuel for Growth program is projected to deliver approximately $45 million in benefits for fiscal 2026, contributing to cumulative savings of $120 million by year-end [18][21] Q&A Session Summary Question: Comparison of BSG and Sally customers and future initiatives - Management noted that the Sally customer is resilient, with positive responses to initiatives like LCOD and a 1.3% growth in Q1, while BSG customers are more value-focused [30][31] Question: Promotional environment and expectations for Q2 - Management indicated that promotional levels were slightly up year-over-year but maintained strong gross margins, with no significant changes expected for Q2 promotions [40][41] Question: Trends in category growth and salon consumer behavior - Management stated that expectations for category growth remain stable, with strength in color and some softness in care, while salon customers are expected to return to regular spending patterns [53][55] Question: Comp guidance and potential for improvement in the second half - Management expressed optimism for the second half of the year, citing new categories and initiatives as potential growth drivers [58][59] Question: Insights on Ignited stores and customer trends - Management reported positive trends in Ignited stores, with increased customer engagement and spending compared to the rest of the fleet [49][60]