Why Coty (COTY) Shares Are Surging Today - Coty (NYSE:COTY)

Coty Inc (NYSE:COTY) reported fourth-quarter FY22 sales growth of 10% year-on-year to $1.17 billion, beating the analyst consensus of $1.14 billion.
Like-For-Like (LFL) revenue increased 16% Y/Y, driven by a 23% increase in Prestige and a 7% increase in Consumer Beauty.
Revenue in the Americas rose 14% Y/Y, EMEA increased 10%, and Asia-Pacific declined 2%.
The gross margin expanded 140 basis points Y/Y to 61.8%, and the gross profit rose 12.6% to $722.1 million.
The adjusted operating margin was 5.6%, and the adjusted operating income for the quarter was $65.1 million.
Adjusted EBITDA of $132.4 million increased 4% Y/Y, resulting in an adjusted EBITDA margin of 11.3%, 70 basis points contraction versus 2Q21.
Adjusted EPS was $(0.01), in line with the Street view.
Cash from operating activities for twelve months totaled $726.6 million with a free cash flow of $552.5 million. The company held $263.8 million in cash and equivalents as of June 30, 2022.
"While macro concerns continue to dominate headlines, it's important to remember that beauty is amongst the most resilient discretionary categories," said CEO Sue Y. Nabi.
"With continued momentum in the fragrance category, Europe and global travel retail, and a strong pipeline of innovation, we expect FY23 to be a year of continued expansion, in-line with our medium-term growth targets," Nabi added.
Outlook: Coty anticipates FY23 adjusted EPS growth in the mid-teens. The company expects adjusted EPS growth acceleration in FY24 and beyond, fueled by lower interest expenses.
Price Action: COTY shares are trading higher by 7.17% at $7.92 on the last check Thursday.
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