We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
COTY Rides On Solid Beauty Product Demand, Headwinds Persist
Read MoreHide Full Article
Coty Inc. (COTY - Free Report) has been benefiting from strength in its Prestige & Consumer Beauty businesses, which boosted its fourth-quarter fiscal 2023 performance. In the quarter, Prestige segment’s revenues increased by 21% year-over-year to $799.6 million. The improvement was backed by strength in the prestige fragrance category, owing to the continued success of fragrance brands like Burberry, Hugo Boss, Calvin Klein, Gucci and Marc Jacobs.
The Consumer Beauty segment’s revenues increased 9% year-over-year to $552 million, driven by strength across its body care, skincare and color cosmetics categories. Apart from these, the company continues to witness impressive momentum in Travel Retail sales. Its Travel Retail sales grew by more than 30% for both the fiscal fourth quarter and fiscal 2023, representing approximately 8% of its overall business.
Driven by solid business momentum, Coty raised its guidance for the first half of fiscal 2024. For the first half of fiscal 2024, the company expects its core like-for-like (“LFL”) sales to grow in the range of 10-12%. This marks an increase from its previous estimate of 8-10% projected in fourth-quarter fiscal 2022 earnings call. COTY currently anticipates overall fiscal 2024 core LFL sales growth of 8-10%, surpassing its earlier guidance to achieve the upper limit of its medium-term target range of 6-8%.
The company is committed to optimizing the overall cost structure. In this regard, the company’s fixed cost reduction program has been helping it redirect capital to improve brands and delivery profit. It is progressing well with the All In to Win transformation program, driving notable improvements in cost, gross margins, sales growth and cash.
In the fourth quarter of fiscal 2023, the company delivered savings of nearly $50 million, which brings its year-to-date savings to nearly $180 million. The company now targets savings of more than $100 million for fiscal 2024, higher than its previous target of $90 million.
Image Source: Zacks Investment Research
This Zacks Rank #3 (Hold) company’s shares have gained 16.2% in the year-to-date period against the industry’s decline of 32.1%.
However, the company has been witnessing rising operating costs and a dynamic supply chain environment. In the fiscal fourth quarter, its cost of sales increased to $502.1 million from $446.2 million reported in the year-ago period. Also, in fiscal 2023, the metric increased to $2,006.8 million from $1,935.2 million reported in the previous fiscal year. If not controlled, a rise in costs and operating expenses might dent the company’s margins and profitability in the quarters ahead.
Given its extensive presence across international markets, the company is exposed to the risk of adverse currency fluctuations. The company incurred more than $70 million of negative foreign exchange impacts on adjusted EBITDA in fiscal 2023.
Post Holdings is a consumer-packaged goods holding company. POST has a trailing four-quarter earnings surprise of 59.6%, on average. The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings suggests growth of 13.2% and 189.3%, respectively, from the year-ago reported numbers.
Inter Parfums manufactures, markets and distributes a range of fragrances and fragrance-related products. The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales and earnings indicates 19.7% and 14.9% growth from their respective year-ago reported figures. IPAR has a trailing four-quarter earnings surprise of 45.9%, on average.
Grocery Outlet is a retailer of consumables and fresh products. GO has a trailing four-quarter earnings surprise of 14.3%, on average. The Zacks Consensus Estimate for GO’s current financial-year sales and EPS indicates improvements of 11.2% and 4.9%, respectively, from the year-ago reported numbers.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
COTY Rides On Solid Beauty Product Demand, Headwinds Persist
Coty Inc. (COTY - Free Report) has been benefiting from strength in its Prestige & Consumer Beauty businesses, which boosted its fourth-quarter fiscal 2023 performance. In the quarter, Prestige segment’s revenues increased by 21% year-over-year to $799.6 million. The improvement was backed by strength in the prestige fragrance category, owing to the continued success of fragrance brands like Burberry, Hugo Boss, Calvin Klein, Gucci and Marc Jacobs.
The Consumer Beauty segment’s revenues increased 9% year-over-year to $552 million, driven by strength across its body care, skincare and color cosmetics categories. Apart from these, the company continues to witness impressive momentum in Travel Retail sales. Its Travel Retail sales grew by more than 30% for both the fiscal fourth quarter and fiscal 2023, representing approximately 8% of its overall business.
Driven by solid business momentum, Coty raised its guidance for the first half of fiscal 2024. For the first half of fiscal 2024, the company expects its core like-for-like (“LFL”) sales to grow in the range of 10-12%. This marks an increase from its previous estimate of 8-10% projected in fourth-quarter fiscal 2022 earnings call. COTY currently anticipates overall fiscal 2024 core LFL sales growth of 8-10%, surpassing its earlier guidance to achieve the upper limit of its medium-term target range of 6-8%.
The company is committed to optimizing the overall cost structure. In this regard, the company’s fixed cost reduction program has been helping it redirect capital to improve brands and delivery profit. It is progressing well with the All In to Win transformation program, driving notable improvements in cost, gross margins, sales growth and cash.
In the fourth quarter of fiscal 2023, the company delivered savings of nearly $50 million, which brings its year-to-date savings to nearly $180 million. The company now targets savings of more than $100 million for fiscal 2024, higher than its previous target of $90 million.
Image Source: Zacks Investment Research
This Zacks Rank #3 (Hold) company’s shares have gained 16.2% in the year-to-date period against the industry’s decline of 32.1%.
However, the company has been witnessing rising operating costs and a dynamic supply chain environment. In the fiscal fourth quarter, its cost of sales increased to $502.1 million from $446.2 million reported in the year-ago period. Also, in fiscal 2023, the metric increased to $2,006.8 million from $1,935.2 million reported in the previous fiscal year. If not controlled, a rise in costs and operating expenses might dent the company’s margins and profitability in the quarters ahead.
Given its extensive presence across international markets, the company is exposed to the risk of adverse currency fluctuations. The company incurred more than $70 million of negative foreign exchange impacts on adjusted EBITDA in fiscal 2023.
Key Picks
Here, we have highlighted three top-ranked stocks, namely Post Holdings (POST - Free Report) , Inter Parfums (IPAR - Free Report) and Grocery Outlet Holding Corp. (GO - Free Report) . While Post Holdings sports a Zacks #1 Rank (Strong Buy), Inter Parfums and Grocery Outlet each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Post Holdings is a consumer-packaged goods holding company. POST has a trailing four-quarter earnings surprise of 59.6%, on average. The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings suggests growth of 13.2% and 189.3%, respectively, from the year-ago reported numbers.
Inter Parfums manufactures, markets and distributes a range of fragrances and fragrance-related products. The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales and earnings indicates 19.7% and 14.9% growth from their respective year-ago reported figures. IPAR has a trailing four-quarter earnings surprise of 45.9%, on average.
Grocery Outlet is a retailer of consumables and fresh products. GO has a trailing four-quarter earnings surprise of 14.3%, on average. The Zacks Consensus Estimate for GO’s current financial-year sales and EPS indicates improvements of 11.2% and 4.9%, respectively, from the year-ago reported numbers.