Coty Inc (NYSE:COTY), one of the world’s largest beauty companies with a portfolio of iconic brands across fragrance, stock rose 3.08% (As on August 23, 11:40:25 AM UTC-4, Source: Google Finance) after the company forecast annual profit below Wall Street expectations, signaling a hit from steeper input expenses in the first half of the year, and said it would raise product prices as it battles higher costs and a strong dollar. Coty once again delivered industry-leading innovations during the year, including Burberry Hero EDP and Burberry Her Elixir, Hugo Boss Parfum and Gucci Flora Gorgeous Jasmine, while the Chloe Atelier des Fleurs line continued to excel in the ultra- premium fragrance segment in Asia. As part of Coty’s expectation to divest its Wella stake by end of CY25, in July 2023 the Company entered a binding Letter of Intent to sell 3.6% of its Wella stake to IGF Wealth Management for $150 million, subject to customary closing conditions including consent by KKR.
COTY in the fourth quarter of FY 23 has reported the adjusted earnings per share of 1 cents, missing the analysts’ estimates for the adjusted earnings per share of 2 cents, according to Refinitiv data. The company had reported the adjusted revenue growth of 16 percent to $1.35 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $1.31 billion. In Q4, the adjusted gross margin grew 70 bps YoY to 62.8%. 4Q23 free cash flow was $38.1 million.
Moreover, Prestige segment led during the quarter, with both reported and LFL sales growth of 21% versus the prior year. Consumer Beauty revenue rose 9% as reported in Q4, with core LFL growth of 10%, driven by strong growth across all categories.
Coty forecast 2024 adjusted profit between 44 cents and 47 cents per share, compared to estimates of 48 cents.
On the other hand, Marc Jacobs International has signed an expanded long-term license agreement with COTY that will bring Marc Jacobs Beauty into its iconic portfolio. COTY has long held the license for Marc Jacobs Fragrances. The revival of Marc Jacobs’ cosmetic portfolio, now in partnership with Coty, is eagerly anticipated by consumers around the world who have been campaigning for its return. This agreement reinforces Coty’s position as a go-to partner for global fashion houses and brands that share our ambition of creating leading beauty portfolios.