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Mar 31, 2024
Coty Q3 2024 Earnings Report
Demonstrated strong results ahead of the beauty market, with double-digit growth and sales exceeding expectations, driven by prestige share gains and strength in beauty demand, while continuing expansion in operating income and margin, leading to raised FY24 outlook.
Key Takeaways
Coty Inc. reported strong Q3 2024 results, with net revenues up 8% and LFL revenue up 10%. The company experienced growth in both Prestige and Consumer Beauty segments across all regions. Strong gross margin expansion and reported operating income growth contributed to an increased adjusted EBITDA margin. Coty raised its FY24 outlook to the high end of its guidance range.
Net revenues increased by 8% on a reported basis and 10% on a LFL basis, surpassing guidance.
Prestige net revenues grew by 8% reported and 13% LFL, driven by fragrances, cosmetics, and skincare.
Consumer Beauty net revenues increased by 6% on both a reported and LFL basis, with growth in color cosmetics and mass fragrances.
Adjusted operating income increased by 17%, resulting in 90 basis points of adjusted operating margin expansion.
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 to be at the high end of its prior guidance range of +9-11%. The company also expects FY24 adjusted EBITDA margin expansion to be at the upper end of its previous guidance range of 10 to 30 basis points. Coty now expects FY24 adjusted EPS to be at the high end of the prior guidance range, excluding the equity swap, of $0.44 to $0.47.
Positive Outlook
- Global beauty market remains strong.
- Demand for prestige fragrances continues to grow at a double-digit percentage pace.
- Mass beauty market is performing consistent with historical levels.
- Company continues to benefit from this attractive market dynamic with momentum across its core categories.
- Strong launch results and early wins in key white spaces.
Challenges Ahead
- Q4 includes expectations for low-to-mid single-digit percentage LFL revenue growth.
- Reflects an estimated mid-single-digit percentage headwind in its Prestige business from difficult prior year comparisons.
- Reported revenues in Q4 are expected to include a 1-2% headwind from FX.
- Approximately 2% scope headwind from the divestiture of the Lacoste license.
- FX headwinds in Q4 are contributing to Coty's expectations for FY24 adjusted EBITDA to remain within its prior guidance range of $1,080 to $1,090 million based on current FX rates.
Revenue & Expenses
Visualization of income flow from segment revenue to net income