Coty Stock Gains After Q4 Results; Plans Partial IPO Of Brazil Business

Coty Inc COTY reported fourth-quarter FY21 revenue growth of 89.6% year-on-year, to $1.06 billion, beating the analyst consensus of $1.02 billion. Net revenues 80.7% LFL.
Sales in the Americas region grew 68.9% Y/Y, Asia Pacific increased 70% in Q4, and EMEA sales surged 123.4%.
E-commerce sales climbed nearly 19%, resulting in a high-teens e-commerce penetration for the year.
The gross margin for the quarter expanded 2040 basis points to 60.4%.
Adjusted operating margin was 4.2%, with adjusted operating income of $44.3 million against $(335.3) million in Q4 FY20.
The company held $253.5 million in cash and equivalents as of June 30, 2021.
Net cash provided by operating activities totaled $32.3 million with a free cash flow of $2.1 million.
Net Debt equaled $5.2 billion as of June 30, 2021.
Adjusted EBITDA was $127.3 million versus $(246.6) million last year. The adjusted EBITDA margin was 12%.
Adjusted EPS of $(0.09) missed the analyst consensus of $(0.05).
Coty confirms that it is pursuing a partial IPO of its Brazil business.
Outlook: Coty expects 1Q22 LFL sales growth in the high teens percentage.
For FY22, Coty targets LFL sales growth in the low teens coupled with adjusted EBITDA of ~$900 million on a constant currency basis.
Price Action: COTY shares are trading higher by 4.98% at $8.64 in premarket on the last check Thursday.

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