In This Article:
Beauty products company Coty (NYSE:COTY) fell short of the market’s revenue expectations in Q1 CY2025, with sales falling 6.2% year on year to $1.30 billion. Its non-GAAP profit of $0.01 per share was 81% below analysts’ consensus estimates.
Is now the time to buy Coty? Find out in our full research report.
Coty (COTY) Q1 CY2025 Highlights:
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Revenue: $1.30 billion vs analyst estimates of $1.31 billion (6.2% year-on-year decline, 1% miss)
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Adjusted EPS: $0.01 vs analyst expectations of $0.05 (81% miss)
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Adjusted EBITDA: $204.2 million vs analyst estimates of $188.4 million (15.7% margin, 8.4% beat)
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Operating Margin: 17.4%, up from 5.6% in the same quarter last year
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Free Cash Flow was -$168.4 million compared to -$234.3 million in the same quarter last year
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Organic Revenue was flat year on year
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Market Capitalization: $4.50 billion
"Across economic cycles, beauty has remained resilient for decades. Even in this challenging landscape, we have significantly strengthened our strategic, operational, and financial fundamentals, driving margin expansion, stronger cash flow generation, and substantial deleveraging over the past four years,” said Sue Nabi, Coty's CEO.
Company Overview
With a portfolio boasting many household brands, Coty (NYSE:COTY) is a beauty products powerhouse spanning cosmetics, fragrances, and skincare.
Sales Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $6.00 billion in revenue over the past 12 months, Coty carries some recognizable products but is a mid-sized consumer staples company. Its size could bring disadvantages compared to larger competitors benefiting from better brand awareness and economies of scale.
As you can see below, Coty’s 4.9% annualized revenue growth over the last three years was tepid. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.
This quarter, Coty missed Wall Street’s estimates and reported a rather uninspiring 6.2% year-on-year revenue decline, generating $1.30 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 1.6% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products will see some demand headwinds.
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