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Dec 31, 2021
Coty Q2 2022 Earnings Report
Reported strong results across all metrics, demonstrating significant momentum into the next quarter.
Key Takeaways
Coty's Q2 2022 results demonstrated strong financial improvement and delivery across its strategic growth pillars, with sales increasing 12% as reported and LFL. The company experienced significant gross margin expansion and cost reductions, allowing for profit growth and reinvestment in media. Coty is raising its FY22 adjusted EPS guidance to $0.22-0.26.
Net revenues increased 12% on a reported and LFL basis, driven by solid growth in both Prestige and Consumer Beauty.
Reported operating income was $244.0 million.
Adjusted EBITDA increased 10%, with an adjusted EBITDA margin of 19.8%.
Adjusted EPS of $0.17, improved from $0.13 last year, including a 2 cent discrete tax benefit in the quarter.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Coty expects FY22 LFL sales growth to be at the upper end of its guidance range of low-to-mid teens percentage growth. The Company continues to expect FY22 adjusted EBITDA of $900 million at a minimum, on a constant currency basis, and raises its FY22 adjusted EPS guidance to $0.22-0.26.
Positive Outlook
- FY22 LFL sales will be at the upper end of its guidance range of low-to-mid teens percentage growth.
- FY22 adjusted EBITDA of $900 million at a minimum, on a constant currency basis.
- FY22 adjusted EPS guidance to $0.22-0.26.
- Target leverage of approximately 4x exiting CY22.
- Target leverage of approximately 2x exiting CY25.
Challenges Ahead
- A headwind of 3-4% to its reported sales in 2H22 is expected based on current FX rates.
- The impact of inflation is anticipated to increase in the second half of FY22.
- FX benefits in 1H22 are expected to be offset by FX headwinds in 2H22.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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