COTY Set to Report Q1 Earnings: What Awaits the Stock?
Coty Inc. COTY is likely to register a top-and-bottom-line increase when it reports first-quarter fiscal 2024 earnings on Nov 7. The Zacks Consensus Estimate for revenues is pegged at $1.6 billion, suggesting growth of 13.4% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has remained unchanged in the past 30 days at 17 cents per share. This indicates a jump of 54.6% from the year-ago quarter’s reported figure. COTY has a trailing four-quarter earnings surprise of 132.5%, on average.
Factors to Note
Coty has been benefiting from its focus on six strategic pillars aimed at sustainable growth. These include stabilizing Consumer Beauty make-up brands and mass fragrances, accelerating luxury fragrances and setting up Coty as a core player in prestige make-up, establishing a skincare portfolio in prestige and mass channels, strengthening e-commerce and Direct-to-Consumer (DTC) capabilities, growing presence in China via Prestige and certain Consumer Beauty brands and setting Coty as an industry leader in sustainability.
These upsides are likely to have driven results in the quarter under review. Gains from Coty’s prudent partnerships have also been an upside. In January 2023, Coty and Jil Sander unveiled that they renewed their license deal, stepping in for a long-running collaboration. Before this, Coty entered into a multi-channel agreement with Perfect Corp. This helps Coty’s customers shop in the most convenient and personalized manner, both online and offline. Moreover, the company’s buyout of the iconic Burberry brand has been yielding favorably. This acquisition has been supporting growth in the Prestige segment.
Coty Price, Consensus and EPS Surprise
Coty price-consensus-eps-surprise-chart | Coty Quote
We note that Coty has been witnessing strength in its Prestige & Consumer Beauty businesses. Our model suggests revenue growth of 8.7% and 11.4%, respectively, for the Prestige and Consumer Beauty units in the first quarter.
Cost-containment strategies like the All In to Win transformation program have been working well in an inflationary environment. All these upsides, along with management’s guidance for the first half of fiscal 2024, give out positive signals for first-quarter results. We expect organic (LFL) net revenue growth of 8.9% for Coty in the first quarter of fiscal 2024. Our model suggests an adjusted gross margin expansion of 60 basis points for the quarter under review.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Coty this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Coty carries a Zacks Rank #2 and has an Earnings ESP of -1.33%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
Inter Parfums IPAR currently has an Earnings ESP of +0.30% and a Zacks Rank #2. The company is likely to register top-and-bottom-line growth when it reports third-quarter 2023 numbers. The Zacks Consensus Estimate for Inter Parfums’ quarterly revenues is pegged at $368 million, indicating a rise of 31.2% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Inter Parfums’ quarterly earnings per share of $1.33 suggests an increase of 2.3% from the year-ago quarter’s levels. IPAR has a trailing four-quarter earnings surprise of 45.9%, on average.
International Flavors & Fragrances IFF has an Earnings ESP of +7.43% and a Zacks Rank #3. The company is slated to witness a top-line decline when it reports third-quarter 2023 results. The Zacks Consensus Estimate for IFF’s quarterly revenues is pegged at around $2.8 billion, which suggests a decrease of 9.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for International Flavors & Fragrances’ quarterly earnings has moved down by 9.5% over the past 30 days to 76 cents per share, which suggests a decline of 44.1% from the year-ago quarter’s reported number. IFF delivered a negative earnings surprise of 4.1%, on average, in the trailing four quarters.
Monster Beverage MNST currently has an Earnings ESP of +0.85% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports third-quarter 2023 results. The Zacks Consensus Estimate for Monster Beverage’s quarterly revenues is pegged at $1.9 billion, suggesting growth of 14.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Monster Beverage’s quarterly earnings has remained unchanged in the past 30 days at 40 cents per share, which indicates 33.3% growth from the year-ago quarter's reported number. MNST delivered an earnings surprise of 2.2%, on average, in the trailing four quarters.
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International Flavors & Fragrances Inc. (IFF) : Free Stock Analysis Report
Inter Parfums, Inc. (IPAR) : Free Stock Analysis Report
Monster Beverage Corporation (MNST) : Free Stock Analysis Report
Coty (COTY) : Free Stock Analysis Report
