Coty (COTY) Misses Q1 EPS by 5c; offers guidance

Coty (NYSE: COTY) reported Q1 EPS of $0.15, $0.05 worse than the analyst estimate of $0.20. Revenue for the quarter came in at $1.67 billion versus the consensus estimate of $1.68 billion.

GUIDANCE:

Coty sees FY2025 EPS of $0.54-$0.57, versus the consensus of $0.56.

Through the combination of continued sales growth, continuous gross margin expansion and increased cost savings for FY25 and beyond, while maintaining A&CP in the high 20s percentage, Coty expects FY25 adjusted EBITDA to grow near the lower end of its prior guidance of +9-11% YoY. This outlook includes resumed adjusted EBITDA growth in Q2 in the mid single digit percentage, with steady EBITDA growth acceleration in Q3 and Q4. This adjusted EBITDA growth target, in conjunction with continued though more moderate revenue growth, reflects an even stronger adjusted EBITDA margin expansion in FY25 of close to 100 bps, following the 30 bps adjusted EBITDA margin expansion in FY24.

Coty continues to expect FY25 free cash flow to grow by a double-digit percentage YoY to the low to mid $400M range. With the tight inventory management by retailers adding some variability on cash inflow timing, Coty remains on track to exit CY24 with leverage below 3x and continues to target leverage close to 2.5x exiting CY24.

For earnings history and earnings-related data on Coty (COTY) click here.

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