Coty posts Q4 loss but provides upbeat outlook

For FY24, Coty’s net revenues grew 10 percent on a reported and 11 percent on a LFL basis to 6.1 billion dollars. The company’s fourth quarter net revenues grew 1 percent on a reported basis and 5 percent on a LFL basis to 1.4 billion dollars.

Coty’s adjusted EBITDA grew 12 percent to 1,091.1 million dollars with an adjusted EBITDA margin of 17.8 percent, up 30 basis points.

Commenting on the operating results, Sue Nabi, Coty's CEO, said in a statement: "Our FY24 results set a new milestone in Coty's sustained track record of top-notch execution and market outperformance.”

Highlights of Coty’s results across segments and markets

In FY24, the company said Prestige net revenues grew by 13 percent on a reported and 14 percent on a LFL basis driven by growth in fragrances, cosmetics and skincare. In the fourth quarter, Prestige net revenues were flattish on a reported basis and increased 6 percent on a LFL basis.

Consumer Beauty revenues increased 6 percent on both a reported basis and LFL basis during the year, with growth in colour cosmetics, mass fragrances and mass skin & body care, while net revenues increased 2 percent on a reported basis and 4 percent on a LFL basis in the fourth quarter.

The company’s revenues in the Americas rose 10 percent as reported and 12 percent LFL in FY24 and 3 percent as reported and 8 percent LFL in the fourth quarter driven by strong high-single-digit to double-digit percentage growth in Latin America, Canada and the travel retail channel.

EMEA's net revenues increased 11 percent as reported and LFL in FY24 and 1 percent as reported and 5 percent LFL in the fourth quarter, while Asia Pacific net revenues grew 9 percent as reported and 11 percent LFL in FY24, and declined 4 percent as reported and 2 percent LFL during the quarter under review.

FY24 reported net income decreased to 76.2 million dollars, while adjusted net income decreased to 323.1 million dollars. Fourth quarter reported net loss was 100.2 million dollars and adjusted net loss was 23.9 million dollars.

Coty targets FY25 adjusted EBITDA growth of 9 to 11 percent

“Looking to FY25, we expect our financial results to be consistent with our medium-term algorithm, with our outlook further reinforced by our white space opportunities, our robust commercial plans, and the strength of our innovation pipeline, including Burberry Goddess Intense, Chloe Signature Intense, Gucci Flora Gorgeous Orchid, Lancaster Golden Lift, CoverGirl Eye Enhancer 3D Mascara and Adidas Vibes,” added Nabi.

Coty is targeting FY25 adjusted EBITDA growth of 9 to 11 percent to 1,186 to 1,208 million dollars, despite the expected FX headwinds and the profit headwind from the divestiture of the Lacoste licence.

The company added that the adjusted EBITDA margin expansion is forecasted to be between 10 to 30 basis points. The company targets total adjusted EPS, excluding equity swap, of 54 cents to 57 cents, implying 15 to 20 percent growth and a 19 to 22 percent CAGR on a two-year basis.