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Mar 31, 2022
Coty Q3 2022 Earnings Report
Sales growth exceeded expectations, driven by strong performance in both divisions and fueled by the U.S., Europe, and Travel Retail, accompanied by continuous gross margin expansion and deleveraging progress.
Key Takeaways
Coty's Q3 2022 results showed strong sales growth, with a 15% increase in reported sales and 19% on an LFL basis. This growth was driven by both the Prestige and Consumer Beauty segments, with significant contributions from the U.S., Europe, and Travel Retail. The company also achieved gross margin expansion and continued progress on deleveraging.
Net revenues increased 15% as reported and 19% on a LFL basis, driven by strong growth in both Prestige and Consumer Beauty.
Reported operating income totaled $57.1 million.
Adjusted EBITDA was $182.5 million with a margin of 15.4%.
Adjusted EPS of $0.03, improved from $0.01 last year.
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 FY22 LFL sales will be at the upper end of its guidance range of low-to-mid teens percentage growth. Coty continues to expect FY22 adjusted EBITDA of $900 million and raises its FY22 adjusted EPS guidance to $0.23-0.27.
Positive Outlook
- Brand investments are driving attractive ROI and fueling strong topline growth.
- Strong revenues and sell-out momentum YTD.
- The company continues to expect FY22 adjusted EBITDA of $900 million.
- Coty raises its FY22 adjusted EPS guidance to $0.23-0.27.
- The Company continues to target leverage towards 4x exiting CY22 and approximately 2x exiting CY25.
Challenges Ahead
- Expected impact in Q4 from Coty's decision to exit operations in Russia including local Travel Retail, which accounts for approximately 3% of total revenues.
- Near-term COVID lockdowns in China.
- The industry faces lockdowns in China.
- The industry faces the war in Ukraine.
- The industry faces inflationary headwinds, and global supply pressures.
Revenue & Expenses
Visualization of income flow from segment revenue to net income