Coty's preliminary Q1 sales results increased 4-5% (all figures like-for-like), missing the previous estimate of of 6%; full results will be released November 6, 2024. Q1 adjusted EBITDA is expected to be "roughly flat to moderately lower" year-over-year, though the company is expecting a significant gross margin expansion.
The company has cited "retailer caution" and a slowing U.S. market in anticipating moderate Q2 growth. Global growth, meanwhile, has been "solid," per the company, but slower overall compared to recent quarters, per Coty.
Other challenged markets include Australia, China and Asian travel retail. China, in particular, represents a relatively low exposure compared to other giants such as The Estee Lauder Companies.
That said, second-half fiscal 2025 sales are expected to pick up the pace, in part driven by "strong launch initiatives" and expanded distribution.
Coty is now forecasting a full-year fiscal 2025 EBITDA increase of 9-11%.
Top performers in Q1 fiscal 2025 included prestige fragrance, led by volume and price gains. Mass beauty, on the other hand, is experiencing a drop in unit demand and, therefore, slower growth.
In response to challenged results, Coty is enacting "cost reduction efforts" to boost its expected savings above original forecasts in the hopes of offsetting any misses in sales.