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Jun 30, 2023
Coty Q4 2023 Earnings Report
Coty achieved strong sales and profit growth, exceeding expectations with double-digit growth in both divisions.
Key Takeaways
Coty Inc. reported strong Q4 FY23 results, with sales increasing 16% and profits growing significantly. The company's performance exceeded expectations and raised guidance, driven by momentum in both the Prestige and Consumer Beauty segments. Coty is well-positioned for future growth, with a focus on innovation, sustainability, and deleveraging.
Q4 net revenues increased 16% as reported and 17% LFL, driven by strong double-digit LFL growth in both Prestige and Consumer Beauty.
Reported operating income totaled $129.0 million in 4Q23.
4Q23 adjusted operating income increased 61% to $105.1 million from $65.1 million in the prior year.
Financial Net Debt was $4.0 billion and Economic Net Debt totaled $3.0 billion at quarter end, resulting in financial leverage of approximately 4.1x.
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 its core business to grow at the top of its medium-term target range of 6-8% LFL, with neutral to 2% benefit from FX and a 1-2% scope headwind from the Lacoste license divestiture. The company targets adjusted EBITDA margin expansion of 10-30bps and adjusted EPS of $0.44-0.47, excluding equity swap.
Positive Outlook
- Beauty market remains a strong and outperforming category.
- Ongoing premiumization trends benefit Coty.
- Momentum across core categories.
- Strong innovation pipeline.
- Early wins in key white spaces.
Challenges Ahead
- Reported FY24 revenues are expected to include neutral to 2% benefit from FX, primarily in first half of FY24.
- A 1-2% scope headwind from the divestiture of the Lacoste license, concentrated in the second half of FY24.
- Expects modest FY24 gross margin expansion year on year, with some negative phasing impacts in 1H24, followed by strong improvement in 2H24.
- The company continues to target further reduction in leverage toward ~3x exiting CY23, ~2.5x exiting CY24 and ~2x exiting CY25.
- Macroeconomic uncertainty.
Revenue & Expenses
Visualization of income flow from segment revenue to net income