Coty (COTY) Raises Adjusted EPS Forecast for FY22 to $ 0.20-0.24


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Coty Inc. (NYSE: COTY) (“Coty” or “the Company”), one of the world’s leading beauty companies and world leader in fragrance, will host an Investor Day on the New York Stock Exchange today. At the event, Coty will provide an update on the significant progress made on the company’s six strategic pillars, detail key operational milestones ahead, report on its comprehensive ‘All-In To Win’ transformation program and will announce its financial goals up to FY25 and beyond.

Sue Y. Nabi, CEO of Coty, said: “Coty has reclaimed its position as a true beauty powerhouse. We expect to outperform the beauty market in FY25 and beyond. I am very proud of the significant progress made by our teams, in line with each of our strategic pillars. I am more confident than ever in Coty’s future and in our ability to deliver meaningful value to all of our stakeholders.

Coty’s magnificent and unique portfolio of brands, our talented team and our determination to generate sustainable and profitable growth, combined with targeted reinvestment, allow us to evolve. We continue to capitalize on tremendous growth opportunities in Premium Fragrances, Skin Care, China, Clean Beauty, and E-commerce. “

Event preview

During today’s event, members of Coty’s leadership team will explain how the company has continued to improve performance against previously communicated strategic priorities, including:

  • Stabilize and develop its Consumer Beauty activity
  • Accelerate luxury perfumes and make Coty a key player in prestigious make-up
  • Build a skin care portfolio in its Prestige and Consumer Beauty divisions
  • Improved e-commerce and direct-to-consumer (DTC) capabilities
  • Develop in China through Prestige and a selection of Consumer Beauty brands
  • Make Coty an industry leader in sustainability

In addition, presenters will also provide insight into the company’s growth framework and the many ongoing initiatives that are transforming and positioning Coty for success, including:

  • The “All-In to Win” program, encompassing cost savings and capital deployment initiatives that unleashed Coty’s full potential, with $ 75 million in additional savings identified for fiscal year 24 ;
  • Coty’s unique and differentiated brand portfolio, covering major beauty product categories across prestige and mass channels;
  • Strong plans to accelerate Coty’s skin care business, which now includes a licensing agreement with ultra premium, multi-award winning skin care brand Orveda and CoverGirl Clean skin care line Fresh recently announced; and
  • Coty’s exceptional growth opportunities that can be achieved by harnessing the power of its brands, distribution reach, R&D, intellectual property and category expertise.

Financial outlook

The company continues to grow its gross margin and cost savings, allowing it to reinvest in key strategic initiatives and simultaneously generate annual profit growth, targeting adjusted EBITDA of at least $ 900 million for the year. 22 and approaching $ 1 billion for fiscal 22. Growing confidence in business progress and improved capital structure leads Coty to raise its FY22 adjusted EPS forecast to 0.20- $ 0.24 compared to its previous forecast of $ 0.19-0.23.

(Consensus predicts FY22 EPS of $ 0.22)

Over the next few years, Coty expects to benefit from an improving beauty market, including a stronger US and Chinese market, a solid rebound in Travel Retail and steady improvement across the board. ‘Europe. Based on this favorable market environment, the strong performance of the recent brand repositioning and product launches, and Coty’s strong category and market expansion plans, the company announces the following financial goals through: ” in exercise 25 and beyond:

  • Net revenues will grow 6% to 8% per annum LFL through FY 25 and beyond, ahead of expected beauty market growth of 3% to 5%
  • Gross margin to reach half of 60% by FY25, and further annual expansion thereafter
  • Increase in adjusted operating margin of 50 to 70 basis points per year through FY 25 and beyond
  • Adjusted EBITDA will grow 9% to 11% per annum through FY25 and beyond
  • Adjusted EPS greater than 30% CAGR through exercise 25, with average to high% growth for teens thereafter
  • Strong annual improvement in free cash flow
  • Leverage target of around 4x by the end of CY22 and 3x by the end of CY23 through expansion of EBITDA and free cash flow, with optimal leverage below 2x
  • End of sale of remaining 26% stake in Wella by FY25, further strengthening Coty’s balance sheet and leverage

Webcast information

Coty’s Investor Day presentation will be available for webcast at investors.coty.com starting at 8:30 a.m. ET (Eastern Time), ending around 12 p.m. ET. Webcast and presentation materials are available on Coty’s Investor Relations website. A replay of the webcast will be available after the event.

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