Coty Raises Q4 & FY23 Outlook On Strong Demand Acceleration

Coty Inc COTY increased its Q4 and FY23 outlook before its investor event in Paris on the strong demand growth in most categories and markets. 

Outlook: COTY increased Q4 FY23 guidance for revenue growth to +12% to +15% on a like-for-like (LFL) basis, vs. the previous outlook for +10% growth, led by solid momentum in Prestige and the recovery in the China market. 

For FY23, COTY now projects FY23 core revenue growth of 10%-11% on an LFL basis (excluding the impact of the Russia exit), above its previous outlook for 9%-10% LFL growth.

The company raised guidance for FY23 adjusted EBITDA to $965 million-$970 million, vs. the previous outlook of $955 million-$965 million. 

The guidance reflects a negative FX impact of $70 million in FY23, including over $10 million in Q4 FY23.

COTY maintains its outlook for target leverage of 3x by the end of CY23 and approximately 2x by the end of CY25.

At the investor event, COTY will provide an update on its digital strategy and end-to-end capabilities to achieve strong and balanced growth.

"Throughout its history, the U.S. and Europe have been Coty's centers of gravity and our exploration of a dual listing in Paris is a natural next step. Since Coty invented modern perfumery over 120-years ago in Paris, this heritage and consistent innovations have cemented our position as a Global Beauty Powerhouse," said Sue Nabi, CEO.

In May, COTY reported third-quarter FY23 sales growth of 9% year-on-year to $1.29 billion, beating the consensus of $1.22 billion, and adjusted EPS was $0.19, beating the analyst consensus of $0.03.

Price Action: COTY shares are trading higher by 1.84% at $12.75 premarket on the last check Thursday.