Coty Reports Preliminary Q1 Results and Maintains FY25 EBITDA Growth Outlook

Coty Inc, a leading beauty company, has released its preliminary results for Q1 2024. The company reaffirms its fiscal year 2025 growth outlook with adjusted EBITDA projected at 9-11% year-over-year. Despite a slight deceleration in the global beauty market, Coty's Q1 sales increased by 4-5% like-for-like, slightly below its initial estimate of 6% LFL growth. This was largely due to cautious inventory management by retailers, especially in markets like the U.S., Australia, China, and Travel Retail Asia.

The prestige fragrance segment outperformed, while mass beauty grew slowly. Looking ahead, Coty expects Q2 sales to grow modestly, anticipating acceleration in H2 2024 due to favorable comparisons and strategic launches. Adjusted EBITDA for Q1 is forecasted to be flat or slightly lower year-over-year.

In response to a volatile demand environment, Coty is intensifying cost reduction measures, aiming for savings beyond the $75 million targeted for FY25. The company maintains its adjusted EBITDA growth target and expects stronger margin expansion, aiming for leverage around 2.5x by the end of 2024.