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Here's Why You Should Consider Investing in COTY Stock Now
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Coty Inc. (COTY - Free Report) currently boasts robust prospects based on the strong demand environment, strengthening e-commerce capabilities, growth investments and cost management actions. Its focus on six business strategies aimed at sustainable growth also bodes well.
This Zacks Rank #1 (Strong Buy) company has a market capitalization of $10.3 billion. In the past three months, it has gained 12.2% against the industry’s decline of 13.5%.
Image Source: Zacks Investment Research
Let’s delve into the factors that have been benefiting this manufacturer of beauty products for a while now.
Business Strength: Coty has been benefiting from strength across all categories and markets. In third-quarter fiscal 2023, the company’s net revenues came in at $1,288.9 million, reflecting an increase of 9% year over year. The company continues to witness strength across both its Prestige and Consumer Beauty businesses, driven by demand across all markets. For fiscal 2023, it anticipates core like-for-like (LFL) sales growth in the range of 9-10%, up from its previously guided range of 6-8%.
Focus on Core Priorities: The company remains committed to six strategic pillars that are aimed at sustainable growth. These include stabilizing Consumer Beauty make-up brands and mass fragrances; accelerating luxury fragrances and setting up Coty as a core player in prestige make-up; establishing a skincare portfolio in prestige and mass channels and enhancing e-commerce and Direct-to-Consumer (DTC) capabilities. It also includes growing its presence in China and positioning Coty as an industry leader in sustainability. To grow its consumer beauty business, the company is on track with repositioning campaigns and disruptive advertising.
Acquisition Benefits: The company believes in strengthening its businesses by adding assets. Its acquisition of the iconic Burberry brand has been fruitful. This acquisition has been supporting growth in the Prestige segment. Also, the company’s buyout of Procter & Gamble Company’s global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling brands (the P&G Beauty Business), has been noteworthy.
Cost-Management Actions: Coty is focused on optimizing the overall cost structure. The company’s fixed cost reduction program has enabled it to redirect capital to improve brands and delivery profit. In the fiscal third quarter, the company delivered savings of nearly $60 million, which brings the fiscal year-to-date savings to nearly $130 million. For fiscal 2023, the company continues to target savings of about $170 million. We believe that COTY’s efforts to save costs and the upsides mentioned above are likely to boost its margins and profitability in the upcoming quarters.
Celsius Holdings specializes in commercializing healthier, nutritional foods, beverages and dietary supplements. The Zacks Consensus Estimate for CELH’s current financial-year sales suggests 70.4% growth, while earnings per share are expected to rise by 154% from the corresponding year-ago reported figures. The company’s earnings surprise in the last reported quarter was 81.8%.
Conagra Brands operates as a leading branded food company in North America. The Zacks Consensus Estimate for CAG’s current financial-year sales and earnings per share suggests growth of 7.1% and 17%, respectively, from the corresponding year-ago reported figures. The company has a trailing four-quarter earnings surprise of 13.2%, on average.
Barfresh Food manufactures and distributes ready-to-blend beverages. The company’s earnings surprise in the last reported quarter was 0%. The Zacks Consensus Estimate for BRFH’s current financial year sales suggests growth of 33.8%, while earnings are likely to grow 53.7% from the prior-year reported numbers.
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Here's Why You Should Consider Investing in COTY Stock Now
Coty Inc. (COTY - Free Report) currently boasts robust prospects based on the strong demand environment, strengthening e-commerce capabilities, growth investments and cost management actions. Its focus on six business strategies aimed at sustainable growth also bodes well.
This Zacks Rank #1 (Strong Buy) company has a market capitalization of $10.3 billion. In the past three months, it has gained 12.2% against the industry’s decline of 13.5%.
Image Source: Zacks Investment Research
Let’s delve into the factors that have been benefiting this manufacturer of beauty products for a while now.
Business Strength: Coty has been benefiting from strength across all categories and markets. In third-quarter fiscal 2023, the company’s net revenues came in at $1,288.9 million, reflecting an increase of 9% year over year. The company continues to witness strength across both its Prestige and Consumer Beauty businesses, driven by demand across all markets. For fiscal 2023, it anticipates core like-for-like (LFL) sales growth in the range of 9-10%, up from its previously guided range of 6-8%.
Focus on Core Priorities: The company remains committed to six strategic pillars that are aimed at sustainable growth. These include stabilizing Consumer Beauty make-up brands and mass fragrances; accelerating luxury fragrances and setting up Coty as a core player in prestige make-up; establishing a skincare portfolio in prestige and mass channels and enhancing e-commerce and Direct-to-Consumer (DTC) capabilities. It also includes growing its presence in China and positioning Coty as an industry leader in sustainability. To grow its consumer beauty business, the company is on track with repositioning campaigns and disruptive advertising.
Acquisition Benefits: The company believes in strengthening its businesses by adding assets. Its acquisition of the iconic Burberry brand has been fruitful. This acquisition has been supporting growth in the Prestige segment. Also, the company’s buyout of Procter & Gamble Company’s global fine fragrances, salon professional, cosmetics and retail hair color businesses, along with select hair styling brands (the P&G Beauty Business), has been noteworthy.
Cost-Management Actions: Coty is focused on optimizing the overall cost structure. The company’s fixed cost reduction program has enabled it to redirect capital to improve brands and delivery profit. In the fiscal third quarter, the company delivered savings of nearly $60 million, which brings the fiscal year-to-date savings to nearly $130 million. For fiscal 2023, the company continues to target savings of about $170 million. We believe that COTY’s efforts to save costs and the upsides mentioned above are likely to boost its margins and profitability in the upcoming quarters.
Other Key Picks
Some other top-ranked stocks are Celsius Holdings, Inc. (CELH - Free Report) , Conagra Brands, Inc. (CAG - Free Report) and Barfresh Food Group, Inc. (BRFH - Free Report) . While CELH sports a Zacks Rank #1, CAG and BRFH carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Celsius Holdings specializes in commercializing healthier, nutritional foods, beverages and dietary supplements. The Zacks Consensus Estimate for CELH’s current financial-year sales suggests 70.4% growth, while earnings per share are expected to rise by 154% from the corresponding year-ago reported figures. The company’s earnings surprise in the last reported quarter was 81.8%.
Conagra Brands operates as a leading branded food company in North America. The Zacks Consensus Estimate for CAG’s current financial-year sales and earnings per share suggests growth of 7.1% and 17%, respectively, from the corresponding year-ago reported figures. The company has a trailing four-quarter earnings surprise of 13.2%, on average.
Barfresh Food manufactures and distributes ready-to-blend beverages. The company’s earnings surprise in the last reported quarter was 0%. The Zacks Consensus Estimate for BRFH’s current financial year sales suggests growth of 33.8%, while earnings are likely to grow 53.7% from the prior-year reported numbers.