Coty Q3 2021 Earnings Report
Key Takeaways
Coty Inc. reported a 3% revenue decline in Q3 2021, but saw significant improvements in profitability with adjusted EBITDA of $183.2 million and gross margin expansion of 450 bps. The company is executing its strategic plan, with early results in market share gains and strong growth in e-commerce and key markets like China and the U.S.
Revenues declined by 3% (5.5% LFL), impacted by COVID-19 in Europe, but buoyed by +20% LFL growth in Asia Pacific and 30% growth in e-commerce.
Prestige sales grew by 2% LFL, with brands like Gucci, Burberry, and Marc Jacobs showing double-digit growth.
Adjusted EBITDA reached $183.2 million, with a 17.8% margin, driven by gross margin expansion and $110 million in cost savings for the quarter.
CoverGirl gained market share, marking the first gain in over 4 years, while mass beauty retail sell-out returned to growth in March.
Coty
Coty
Coty Revenue by Segment
Coty Revenue by Geographic Location
Forward Guidance
Coty expects to end the year with net revenues of $4.5 billion to $4.6 billion and is reaffirming its target for adjusted EBITDA of $750 million in FY21. The Company plans to continue to lower its leverage ratio towards 5x by the end of CY21.
Positive Outlook
- Strengthened profitability
- Increase commercial investments in Q4
- Continued reduction of costs, with cost reductions on track to reach approximately $300 million in FY21
- Total targeted savings of $600 million through FY23
- Plans to continue to lower its leverage ratio towards 5x by the end of CY21
Revenue & Expenses
Visualization of income flow from segment revenue to net income