Q2 2025 Coty Inc Pre-recorded Earnings Call Transcript
Key Points
- Coty Inc (COTY) achieved a significant milestone by reducing its leverage to below 3 times for the first time in over eight years, indicating improved financial health.
- The company's adjusted gross margin expanded by 170 basis points year-on-year, showcasing strong supply chain savings and pricing benefits.
- Coty Inc (COTY) reported a 16% growth in EPS, excluding the equity swap impact, demonstrating strong profitability despite sales challenges.
- The fragrance segment, which accounts for over 60% of Coty Inc (COTY)'s revenues, continues to perform well, with high-single-digit sell-out growth in prestige fragrances.
- Coty Inc (COTY) is on track to deliver over $120 million in savings for fiscal year '25 through its All In To Win program, supporting future cost efficiency and margin expansion.
- Coty Inc (COTY) faced significant sales pressure in Q2, with like-for-like sales trends below expectations due to challenges in China, Asia, Australia, and the US Consumer Beauty market.
- The company's Consumer Beauty segment saw a 4% decline in like-for-like sales in Q2, driven by market deceleration and tight inventory management by retailers.
- Coty Inc (COTY) anticipates continued sales headwinds in the second half of fiscal '25, with like-for-like sales expected to decline by 1% to 2%.
- The strengthening of the US dollar is expected to create a forex headwind of approximately 3% to 4% in the second half of fiscal '25, impacting reported sales.
- Retailers' tight order and inventory management practices have led to a disconnect between sell-in and sell-out, affecting Coty Inc (COTY)'s revenue performance.
Hello everyone. Welcome everyone to today for the prepared remarks portion of Coty's second-quarter fiscal 2025 earnings. On Tuesday, February 11, 2025, at approximately 8:00 AM Eastern time or 2:00 PM Central European Time, we will hold a separate live Q&A session on our results, which you can access via our investor relations website.
Joining me for our presentation are Sue Nabi, Coty's CEO; and Laurent Mercier, Coty's CFO. Before I hand the call over to Sue, I would like to remind you that many of the comments today may contain forward-looking statements. Please refer to Coty's earnings release and the reports filed with the SEC, where the company lists factors that could cause actual results to differ materially from these forward-looking statements.
In addition, except where noted, the discussion of Coty's financial results and Coty's expectations reflect certain adjustments as specified in the non-GAAP financial measure section of the company's release.
Thank you. I will now turn it over to our CEO, Sue Nabi.
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