Coty maintains FY25 outlook despite market slowdown

Coty’s first quarter sales grew approximately 4 to 5 percent LFL, below its prior estimated growth of 6 percent LFL.

According to the preliminary trading report, factoring in the ongoing retailer caution and incrementally slower US market, the company now anticipates second quarter LFL sales to grow moderately, with some growth acceleration expected in the second half of the year.

The company said that the combination of lower than anticipated order patterns in the second half of the first quarter, the investments behind strong ROI sell-out initiatives, the timing of certain fixed costs, and the profit impact from the divestiture of the Lacoste licence, are resulting in adjusted EBITDA to be roughly flat to moderately lower despite strong gross margin expansion.

In anticipation of a more uncertain demand backdrop, including cautious retailer behaviour and a complex macroeconomic environment, the company added that Coty is re-accelerating its cost reduction efforts across all parts of the P&L to deliver savings above the initial FY25 target of approximately 75 million dollars.

Coty continues to expect FY25 adjusted EBITDA to grow in the range of 9 to 11 percent, consistent with prior guidance, including resumed adjusted EBITDA growth in the second quarter.