Coty Inc. (NYSE:COTY) Q3 2024 Earnings Call Transcript

And we estimate Q4 adjusted EPS excluding the equity swap of $0.05 to $0.06. For the full fiscal ’24 year we expect revenues to grow at the high end of the 9% to 11% like-for-life range, above previous guidance, and supported by outperformance in Prestige. Fiscal ‘24 reported revenues are now expected to include a roughly 1% headwind from ForEx, and a 2% scope headwind in the second-half from the divestiture of the Lacoste license. We continue to expect modest fiscal ‘24 gross margin expansion year-on-year, consistent with our growth algorithm. We now target fiscal ‘24 adjusted EBITDA margin expansion at the upper end of the guidance range of 10 basis points to 30 basis points. We expect fiscal ‘24 adjusted EBITDA consistent with prior range of $1,080 million $1,090 million range as EBITDA margin at the upper end of the guidance range is partially balanced by ForEx headwinds expected in Q4.

We now expect total fiscal ‘24 adjusted EPS to be at the high-end of prior guidance range, excluding the equity swap, of $0.44 to $0.47, implying strong year-over-year growth at the upper end of plus 16% to plus 25%. And we continue of course to target further reduction in leverage towards approximately 2.5 times exiting calendar ‘24 and towards approximately 2 times exiting calendar ‘25 fueled by our cash generation and EBITDA expansion. So to sum up, we continue to see a strong and dynamic beauty market, with our diversified portfolio and strong execution enabling Coty to once again outperform. Coty’s global and multi-category presence is proving to be a key area of strength and differentiation. In this attractive backdrop, we are successfully executing on the strategy we laid out over three years ago, with momentum across our core categories and wins in the many significant white space opportunities we are pursuing.

And we are delivering a best-in-class medium term financial growth algorithm, active deleveraging, and capital returns. As we celebrate our 120th anniversary, we are reinforcing our position as a pioneer and beauty powerhouse and remain excited by our many opportunities ahead. Thank you for joining our Prepared Remarks call today. As a reminder, we’ll be hosting a separate Q&A session on Tuesday, May 7 at 8:15 a.m. Eastern Time or 2:15 p.m. Central European Time.

Operator: