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Sep 30, 2023
Coty Q1 2024 Earnings Report
Delivered very strong start with growth ahead of beauty market; Sales growth accelerated exceeding expectations; Strength continued in both Prestige and Consumer Beauty; Revenue and profit guidance increased; Fully on track to reach leverage targets.
Key Takeaways
Coty Inc. announced strong Q1 FY24 results, with sales growth ahead of the beauty market. The company reported an 18% increase in sales, driven by both Prestige and Consumer Beauty segments. Coty raised its FY24 revenue and profit guidance and is on track to reach its leverage targets.
Net revenues increased 18% as reported and LFL, fueled by double-digit percentage LFL growth in both Prestige and Consumer Beauty.
Reported operating income grew 15% to $197.5 million.
Adjusted EBITDA grew 17% to $360.3 million, with the adjusted EBITDA margin of 22.0%.
Free cash flow totaled $124.0 million, up 41% YoY.
Coty
Coty
Coty Revenue by Segment
Coty Revenue by Geographic Location
Revenue by Segment
Prestige Revenue
CapyFin.comConsumer Beauty Revenue
CapyFin.comRevenue by Geographic Location
Americas Revenue
CapyFin.comEMEA Revenue
CapyFin.comAsia Pacific Revenue
CapyFin.com Forward Guidance
Coty expects FY24 LFL revenue growth of +9-11%, and for the first half FY24, Coty now expects LFL revenue growth of +11-13%. Coty is targeting FY24 adjusted EBITDA margin expansion of 10-30 bps on the stronger revenue outlook, with adjusted EBITDA of $1,080-1,090M. Coty continues to target FY24 adjusted EPS, excluding the equity swap, of $0.44-0.47.
Positive Outlook
- Beauty market remains strong and outperforming.
- Ongoing premiumization trends.
- Momentum across core categories.
- Strong launch results.
- Early wins in key white spaces.
Challenges Ahead
- Scope headwind from the divestiture of the Lacoste license, concentrated in the second half of FY24.
- External environment remains complex.
- Consumers are being considered in their spending.
- Gross margins declined due to elevated inflation.
- Normalization in fragrance giftsets as part of the mix.
Revenue & Expenses
Visualization of income flow from segment revenue to net income