Coty Shares Gain On Q1 Beat, Raised FY22 Sales Growth Outlook

Coty Inc COTY reported first-quarter FY22 sales growth of 22% year-on-year, to $1.37 billion, beating the analyst consensus of $1.36 billion.
Like-For-Like (LFL) revenue increased 20.6% Y/Y, driven by a 33.6% increase in Prestige and a 3.0% increase in Consumer Beauty.
Revenue in the Americas rose 23.6% Y/Y, EMEA increased 18.2%, and Asia-Pacific grew 32.5%.
The gross margin expanded 460 basis points Y/Y to 63.2%, and the gross profit rose 31.5% to $866.9 million.
The adjusted operating margin expanded 700 basis points to 14.6%, and the adjusted operating income for the quarter was $200.5 million.
Adjusted EBITDA of $278.5 million increased 67% Y/Y, resulting in an adjusted EBITDA margin of 20.3%, 550 basis points improvement versus 1Q21.
Adjusted EPS of $0.08 beat the analyst consensus of $0.03.
Cash from operating activities totaled $285.7 million with a free cash flow of $240.7 million. The company held $422.4 million in cash and equivalents as of September 30, 2021.
"While inflation impact is expected to step up in the second half of FY22, we believe the impact is quite manageable, particularly as we double-down on accretive innovations and premiumizing our portfolio," said CEO Sue Y. Nabi.
Outlook: Coty raised its FY22 Like For Like sales outlook to low-to-mid teens percentage growth, up from its previous guidance of low teens growth.
The company expects FY22 adjusted EBITDA of $900 million at a minimum on a constant currency basis.
Coty anticipates FY22 adjusted EPS of $0.19-$0.23 against the consensus of $0.20.
Price Action: COTY shares are trading higher by 8.93% at $10.12 in premarket on the last check Monday.

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