Coty sees FY24 adjusted EPS 44c-47c, consensus 47c

Coty is targeting FY24 adjusted EBITDA margin expansion of 10-30 bps on the stronger revenue outlook, with similar performance in 1H24 and 2H24. As a result, Coty now sees FY24 adjusted EBITDA of $1,080-1,090M based on current FX rates, above its recently raised EBITDA outlook of $1,075-1,085M. Within this outlook, Coty expects steady improvement in the YoY gross margin trajectory, driving modest FY24 gross margin expansion YoY, with strong expansion in 2H24. Coty continues to target FY24 adjusted EPS, excluding the equity swap, of $0.44-0.47, implying strong +16-25% YoY growth, with the incrementally higher profit outlook balanced by the discrete one-time negative tax impact. As part of Coty’s target to manage its diluted share count toward approximately 800 million by FY26, Coty expects to execute a 27 million share buyback in Q3 via its first equity swap and a 23 million buyback in FY25 via its second equity swap.