NEW YORK--(BUSINESS WIRE)--Coty Inc. (NYSE: COTY) (“Coty” or “the Company”), one of the world’s largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care, today increased its outlook for the first half and full year FY24.
Since providing its guidance on its FY23 earnings call four weeks ago, Coty has seen strong momentum in beauty demand across its key markets and categories, particularly in prestige fragrances. At the same time, Coty’s recent launch of its Burberry Goddess fragrance, with its unique and sophisticated scent and packaging, and disruptive in-store activations, is setting new market records and reinforces Coty’s position as a fragrance leader. Not only was Burberry Goddess the winning launch in the U.S. in August, with market sales several times higher than recent competitive blockbuster launches, but two of Coty’s fragrance innovations are among the top five of the Fall. Coty now has three fragrance lines in the U.S. top ten.
The combination of these factors is driving acceleration in Coty’s volumes and sales, with the Company now expecting core LFL sales growth in first half FY24 of +10-12%, an increase from its earlier outlook of +8-10%. This strength is supporting Coty’s increased FY24 core LFL sales growth outlook of +8-10%, up from its earlier guidance to be at the top end of its medium-term target range of +6-8%.
Commenting on the strong business momentum, Sue Nabi, Chief Executive Officer of Coty, said: “The success of Burberry Goddess across key markets confirms that Coty is the go-to destination to create top quality winning fragrances and execute unique and disruptive campaigns. Having spent the past three years strengthening Coty’s fundamentals and elevating Coty’s organizational capabilities across our categories, we enter the next phase of growth with best-in-class innovation and marketing power.”
Coty continues to target modest gross margin expansion in FY24 and 10-30 bps of adjusted EBITDA margin expansion, implying adjusted EBITDA of approximately $1,075-1,085M at current FX rates, an increase from the implied adjusted EBITDA of $1,065-1,075M in its prior guidance. The Company remains on track to drive leverage towards 3x exiting CY23, fueled by seasonally strong free cash flow generation, and towards 2.5x exiting CY24.
The Company remains committed to delivering a best-in-class medium term growth algorithm, including a mid-20s % EPS CAGR based on profit expansion, lower interest expense and in the medium term managing share count towards 800 million; active deleveraging; and targeted capital returns.
About Coty Inc.
Founded in Paris in 1904, Coty is one of the world’s largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care. Coty serves consumers around the world, selling prestige and mass market products in more than 125 countries and territories. Coty and our brands empower people to express themselves freely, creating their own visions of beauty; and we are committed to protecting the planet. Learn more at coty.com or on LinkedIn and Instagram.
Cautionary Note Regarding Forward-looking Statements
The statements contained in this press release include certain “forward-looking statements” within the meaning of the securities laws. These forward-looking statements reflect Coty’s current views with respect to, among other things, its outlook, expected guidance, trends and strategic information. These forward-looking statements are generally identified by words or phrases, such as “anticipate,” “are going to,” “estimate,” “plan,” “project,” “expect,” “believe,” “intend,” “foresee,” “forecast,” “will,” “may,” “should,” “outlook,” “continue,” “target,” “aim,” “potential” and similar words or phrases. These statements are based on certain assumptions and estimates that Coty considers reasonable and are not guarantees of Coty’s future performance, but are subject to a number of risks and uncertainties, many of which are beyond Coty’s control, which could cause actual events or results to differ materially from such statements, including the factors identified in “Risk Factors” included in Coty’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022 and its subsequent quarterly reports on Form 10-Q. All forward-looking statements made in this press release are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this press release, and Coty does not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.
Coty provides guidance only on a non-GAAP basis and does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for restructuring, integration and acquisition-related expenses, amortization expenses, adjustments to inventory, and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant.
