Coty raises FY24 outlook (11.47)
- Co increased its outlook for the first half and full year FY24.
- Since providing its guidance on its FY23 earnings call four weeks ago, Coty has seen strong momentum in beauty demand across its key markets and categories, particularly in prestige fragrances.
- Co is now expecting core LFL sales growth in first half FY24 of +10-12%, an increase from its earlier outlook of +8-10%.
- This strength is supporting Coty's increased FY24 core LFL sales growth outlook of +8-10%, up from its earlier guidance to be at the top end of its medium-term target range of +6-8%.
- Coty continues to target modest gross margin expansion in FY24 and 10-30 bps of adjusted EBITDA margin expansion, implying adjusted EBITDA of approximately $1,075-1,085 mln at current FX rates, an increase from the implied adjusted EBITDA of $1,065-1,075 mln in its prior guidance. The Company remains on track to drive leverage towards 3x exiting CY23, fueled by seasonally strong free cash flow generation, and towards 2.5x exiting CY24.
- The Company remains committed to delivering a best-in-class medium term growth algorithm, including a mid-20s % EPS CAGR based on profit expansion, lower interest expense and in the medium term managing share count towards 800 million; active deleveraging; and targeted capital returns.