Coty Raises FY Profit Outlook; Stock Up

While announcing higher second-quarter results on Wednesday, beauty company Coty Inc. (COTY) raised its fiscal year 2023 adjusted earnings per share outlook. It maintained annual revenues target for the core business. The company said it has identified additional savings projects for both fiscal year 2024 and fiscal year 2025.

In Tuesday pre-market trade, COTY was trading at $10.70 up $0.35 or 3.38%.

Coty continues to see strong demand growth across nearly all markets, particularly in Prestige fragrances, with Coty maintaining strong launch activity in both Prestige and Consumer Beauty.

Coty now expects fiscal year 2023 adjusted earnings per share growth of over 20% to $0.35-0.36, an increase from its previous adjusted earnings per share guidance of $0.32-0.33, excluding any mark-to-market adjustments on the equity swap and assumes no significant changes in the current tax regulations. Analysts polled by Thomson Reuters expect the company to report earnings of $0.32 per share for fiscal year 2023. Analysts' estimates typically exclude special items.

The company continues to anticipate adjusted earnings per share growth of approximately 20% in fiscal year 2024 and beyond fueled by lower interest expenses as part of its deleveraging efforts, consistent with its medium-term targets.

Coty continues to expect fiscal year 2023 revenues for the core business, adjusting for the impact of the Russia exit, to grow 6-8% LFL, with revenue growth trends in second-half of fiscal year 2023 consistent with this range.

Meanwhile, the company said it now targets $90 million of savings in fiscal year 2024, a $15 million increase from its previous target, and an additional $75 million in fiscal year 2025.

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