Coty Inc Stock Price, News & Analysis

Coty Inc. (NYSE: COTY) reported Q2 FY23 results with sales growth exceeding guidance, despite industry constraints impacting fragrance components. Q2 revenues decreased 3% due to foreign exchange headwinds, with a 4% rise in like-for-like (LFL) sales. The exit from Russia negatively affected sales by about 300 bps. Gross margins expanded by 110 bps to 65.5%, while reported operating income was $199.3 million. The company expects FY23 adjusted EBITDA of $955-965 million, with adjusted EPS growth projected over 20%. Coty aims to achieve 3x leverage by the end of CY23 and has identified $90 million in savings for FY24.

Coty (NYSE: COTY), a leading beauty company, has launched the #UndefineBeauty campaign to challenge outdated definitions of beauty in English dictionaries. This initiative highlights that current examples, often reflecting ageism and sexism, do not align with modern societal values. Coty’s CEO, Sue Y. Nabi, emphasizes the need for dictionary publishers to update these definitions to foster inclusivity. The campaign encourages public participation through a petition, reinforcing Coty's commitment to empowering self-expression and making a positive societal impact.

Coty has announced the renewal of its license agreement with Jil Sander, marking the continuation of a partnership that dates back to the 1980s. This renewal initiates a 10-year strategic project aimed at introducing Jil Sander into the global ultra-premium fragrance market. Coty's CEO, Sue Y. Nabi, emphasized the shared vision of enhancing Jil Sander's brand momentum, while Jil Sander's CEO, Ubaldo Minelli, highlighted the brand’s alignment with luxury markets. The collaboration is set to modernize luxury concepts further, emphasizing high-quality fragrances in line with Jil Sander's fashion division.

Coty (NYSE: COTY) has appointed Lubomira Rochet to its Board of Directors, effective January 2, 2023. Rochet, currently a Partner at JAB Holding Company, has over 20 years of experience in digital transformation, notably at L’Oréal. Her leadership was recognized when she was named “Marketer of the Year” in 2019. Coty’s CEO Sue Y. Nabi expressed optimism about Rochet's impact on the company’s digital strategy. This appointment boosts female representation on the board to 50% and increases total board members to twelve.

Coty (NYSE: COTY) has agreed to sell its Lacoste fragrance license back to Lacoste, marking the end of a 6-year partnership. During this period, Lacoste's men's fragrances gained significant market presence, with award-winning products and notable improvements in rankings. Coty's CEO, Sue Y. Nabi, expressed pride in the partnership's achievements and noted that the sale aligns with Coty's strategic goals to concentrate on major fragrance licenses and enhance its deleveraging efforts. The transaction is set to conclude by the end of the calendar year 2023.

Coty has renewed its licensing agreement with HUGO BOSS, extending their partnership to beyond 2035. This agreement encompasses all BOSS and HUGO fragrances, reflecting Coty's growth strategy in the global fragrance market. Both companies aim to enhance their presence, particularly in the U.S. market, and expand BOSS women's fragrances in Europe. The renewal comes with no material changes in licensing terms, and Coty's average remaining duration for top licenses is now approximately ten years, indicating a stable portfolio.

Coty (NYSE: COTY) has announced plans to hedge a share buyback program of approximately $200 million in calendar 2025, on top of a previously announced $200 million buyback for CY24. The company aims to improve its leverage, targeting 4x by CY22, 3x by CY23, and 2x by CY25. Coty is entering into total return swaps with banks to manage stock price exposure related to the buyback. The firm expects continued strong free cash flow generation and steady deleveraging progress in the coming years.

Coty Inc. announced the early results of its tender offers to purchase up to $100 million of its 6.500% Senior Notes and €100 million of its 4.750% Senior Notes, reflecting its ongoing strategy to reduce debt by $1.1 billion over 15 months. The company anticipates a reduction in interest expenses of approximately $8 million annually. With a successful early tender date on November 22, 2022, the accepted notes totaled approximately $76.9 million for the USD notes and €69.7 million for the Euro notes, representing 14% and 28% of outstanding notes, respectively. The offers will expire on December 7, 2022.