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NEW YORK - Shares of Coty Inc . (NYSE:COTY) fell 4.5% in aftermarket trading on Monday after the beauty company reported fiscal second quarter earnings and revenue that missed analyst expectations, as the global beauty market growth moderated from recent highs.
Coty posted adjusted earnings per share of $0.11 for the quarter ended December 31, falling short of the $0.21 consensus estimate. Revenue declined 3% year-over-year to $1.67 billion, below the $1.73 billion analysts were expecting.
The company said its results were impacted by a slowdown in the mass beauty market, particularly in color cosmetics, as well as continued headwinds in the Asia Pacific region, especially China and Travel Retail Asia. While the global fragrance market remained robust, with Coty’s prestige fragrance portfolio growing sell-out at a high single digit rate, tight inventory management by retailers weighed on sell-in.
"As we are now midway through our fiscal year, it is clear that FY25 is shaping up to be a pivotal year," said Sue Nabi, Coty’s CEO. "On the one hand, the global beauty market continues to grow at a healthy pace, even if growth has moderated off of the elevated levels of the last few years. And in this backdrop, fragrances of all price points continue to outperform most other beauty categories."
Looking ahead, Coty expects like-for-like sales trends in the second half of fiscal 2025 to be broadly consistent with Q2’s -1% to -2% range. The company maintained its full-year adjusted EPS guidance of $0.50-$0.52, excluding impacts from its equity swap.
Despite near-term headwinds, Coty remains confident in its ability to accelerate sales growth and outperform the beauty industry in the coming years while expanding margins and cash flow.
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