- Coty has reduced its fiscal year forecast for adjusted Ebitda to between $1.12 billion and $1.13 billion, down from the initial projection of $1.19 billion to $1.21 billion. The market had estimated $1.18 billion.
- The adjusted earnings per share (EPS) forecast is now between 50 cents and 52 cents, previously expected at the low end of 54 cents to 57 cents, with an estimate of 51 cents.
- For the second quarter, Coty reported an adjusted EPS of 11 cents, significantly down from 25 cents year-over-year (y/y).
- Net revenue for the second quarter was $1.67 billion, representing a 3.3% decline y/y, falling short of the estimated $1.72 billion.
- The Americas net revenue was $638.6 million, a 7.2% decrease y/y, below the expected $678.5 million.
- EMEA (Europe, Middle East, and Africa) net revenue increased by 1.7% y/y to $839.8 million, just under the estimate of $840 million.
- The APAC (Asia-Pacific) region saw a net revenue decline of 11% y/y to $191.5 million, missing the expectation of $199.8 million.
- Prestige channel net revenue was $1.12 billion, down 0.6% y/y and matching the estimate.
- Consumer beauty net revenue fell 8.5% y/y to $553.8 million, lower than the anticipated $592.1 million.
- The gross margin improved to 66.7% from 65.1% y/y, surpassing the estimate of 65.6%.
- Adjusted gross margin also increased to 66.8% from 65.1% y/y.
- Adjusted Ebitda stood at $390.7 million, up 6.6% y/y, beating the estimate of $383.9 million.
- Coty foresees a slight decline in reported sales for FY25, primarily driven by a foreign exchange headwind of approximately 3% due to the strengthening US dollar in the second half.
- The APAC region remains under pressure because of challenges in China and Travel Retail Asia.
- Globally, key retailers are managing orders and inventory levels tightly, influenced by notable channel shifts in the US mass beauty market.
A look at Coty Inc Cl A Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 4 | |
| Dividend | 1 | |
| Growth | 5 | |
| Resilience | 2 | |
| Momentum | 2 | |
| OVERALL SMART SCORE | 2.8 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
In terms of Smartkarma Smart Scores, Coty Inc Cl A shows a promising long-term outlook. With a strong score in Growth, the company is positioned well for future expansion and development within the beauty products market. This indicates positive potential for increasing market share and revenue over time. Additionally, Coty Inc Cl A scores high in Value, suggesting that the company is trading at an attractive valuation compared to its industry peers. These factors bode well for investors looking for a company with solid growth prospects and reasonable pricing.
However, it is important to note that Coty Inc Cl A‘s scores in Dividend, Resilience, and Momentum are relatively lower. This could imply some weaknesses in terms of dividend payouts, ability to weather economic downturns, and short-term price performance. Investors should consider these factors alongside the company’s strengths and growth potential when making investment decisions.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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