Coty to Update on Market Beating Progress, Outlook, and White-Space Opportunities at CAGNY 2024 Conference
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Insights
The beauty industry is a dynamic and competitive sector, where consistent outperformance signifies strong strategic management and a deep understanding of consumer trends. The announcement of Coty's +9-11% LFL (Like-For-Like) revenue growth and +11-12% adjusted EBITDA growth is indicative of a robust operational performance, especially given the backdrop of a global economy facing various challenges.
Margin expansion of +10-30 basis points (bps) suggests efficiency improvements and cost management strategies are effectively being implemented. The leveraging target of approximately 2x by the end of CY25 shows a focused deleveraging strategy, which is crucial for maintaining financial flexibility and investor confidence. These financial metrics are essential for stakeholders as they provide a glimpse into the company's health and future prospects.
From an investment standpoint, Coty's reaffirmation of its medium-term growth algorithm at the upper end of their previously stated ranges and the commitment to deleverage are significant. A mid 20s percentage EPS (Earnings Per Share) CAGR (Compound Annual Growth Rate) is particularly compelling for investors looking for growth opportunities. The company's performance is a testament to its competitive positioning within the beauty market and its ability to capitalize on emerging trends.
Moreover, Coty's strategic partnerships and licenses with luxury brands such as Marni and Etro could potentially open up new revenue streams and strengthen its brand portfolio. The focus on e-commerce and travel retail channels aligns with consumer shopping behaviors, which have increasingly shifted online and are expected to continue post-pandemic.
From a branding perspective, Coty's approach of leveraging advocacy marketing and focusing on disruptive innovations is crucial in a market driven by viral trends and social media influence. Coty's ability to quickly build global Top 10 fragrance houses showcases its expertise in capturing market share and consumer attention. The emphasis on science and technology in product development, coupled with effective marketing strategies, positions Coty to meet the evolving demands of beauty consumers and suggests a forward-thinking approach to brand management.
Entering partnerships with high fashion brands not only elevates Coty's prestige but also aligns with consumer desires for luxury and exclusivity. This strategic positioning is likely to enhance brand equity and contribute to long-term revenue growth.
Reiterates FY24 Outlook of +9
Reaffirms Medium Term Algorithm for LFL Revenue Growth at Upper End of +6
Deleveraging Progress on Track to Reach ~2x Leverage Exiting CY25
Coty will provide an update on its strategic and financial progress, its outlook for the future of the beauty market, significant white-space opportunities the Company is targeting, and its plans to create the must-have beauty products of tomorrow. Whether it’s life’s little luxuries in mass beauty, a window into the world of high fashion through prestige fragrances, or the latest advanced skincare formulations, Coty is ideally positioned to capture this robust, viral demand through its rapid progress on advocacy marketing, especially behind its color cosmetics brands.
The Company has consistently and profitably outperformed the beauty market over the last 3 years, strengthening and premiumizing its balanced portfolio, underpinned by disciplined financial management and a successful deleveraging agenda. Coty is building on these strong foundations with a market beating outlook for FY24 of +9
Sue Nabi, Coty’s CEO said, “We have consistently and profitably outperformed the market over recent years, and we are ideally placed to continue to do so, by launching disruptive innovations which are fueling viral demand. We are demonstrating at full scale that Coty is the natural destination for top fashion licenses, thanks to our ability to build global Top 10 fragrance houses in less than 5 years. Our recently announced licenses with two exciting luxury brands, Marni and Etro, reinforce Coty’s position as the go-to beauty partner. Our leading capabilities underpin our latest milestones such as reaching the Top 2 fragrance ranking in both the attractive global travel retail channel as well as the booming global e-commerce channel. Through best-in-class science, innovative technology, and marketing that reaches consumers around the world, we predict our brands, products and new innovations will continue to shine.”
The presentation accompanying management’s remarks will be available on Coty’s Investor Relations website, under Events and Presentations. A live webcast of the presentation will begin at 1:00pm EST or 7:00pm CET and a replay of Coty’s remarks will be available at investors.coty.com/news-events-and-presentations.
About Coty Inc.
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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, 2023 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240219852815/en/
For more information:
Investor Relations
Olga Levinzon
+1 212 389-7733
olga_levinzon@cotyinc.com
Media
Antonia Werther
+31 621 394495
Antonia_Werther@cotyinc.com
Source: Coty
FAQ
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