Coty forecasts soft second-quarter profit as higher costs cloud turnaround efforts
COTY•Coty forecast current-quarter adjusted earnings per share of 16 to 18 cents, while reporting first-quarter sales of $1.56 billion and adjusted earnings of 16 cents per share, both above estimates.
1. Quarter outlook
Coty forecast current-quarter adjusted earnings per share of 16 to 18 cents, compared with analysts’ estimate of 16 cents. CFO Soraya Benchikh said the company had built continued effects from the Middle East conflict into its outlook and did not expect those effects to ease soon.
2. First-quarter results
Coty reported first-quarter sales of $1.56 billion, above estimates of $1.52 billion, and adjusted earnings of 16 cents per share, compared with estimates of 12 cents. The results were driven by strength in key prestige brands, including Hugo Boss, Burberry, Calvin Klein and Marc Jacobs. Marc Jacobs delivered double-digit growth, supported by its Daisy fragrance line and the rollout of its makeup range at Sephora stores.
3. Turnaround efforts
Interim CEO Markus Strobel’s Coty.Curated initiative focuses on the company’s biggest brands, cost-cutting and cash generation. Benchikh said Coty still had a lot of work to do on its turnaround.
