Coty (NYSE: COTY) reported Q1 EPS of $0.11, $0.03 better than the analyst estimate of $0.08. Revenue for the quarter came in at $2.03 billion versus the consensus estimate of $2.17 billion.

Outlook

As we look to the remainder of the year:

2Q19: We expect underlying YoY net revenue trends in 2Q19 to improve versus 1Q19 across all three divisions, inclusive of expected supply chain headwinds. We expect Luxury and Professional Beauty to return to LFL net revenue growth in 2Q19, while Consumer Beauty YoY trends should improve to a high single digit decline. On adjusted operating income, we expect 2Q19 adjusted operating income to be moderately lower YoY, driven by remaining supply chain impacts and FX headwinds. The 2Q19 year-over-year adjusted EPS comparison will be pressured by the $42 million positive tax settlement recorded in 2Q18.
FY19: Despite the supply chain headwinds, we continue to expect operating profit and margin growth in FY19, driven by significant progress in fixed cost reductions and synergy delivery. However, we need some more time to assess the financial impacts of the continuing supply disruptions and, at this stage we are not providing any further guidance, but expect to provide an update on our outlook on the next earnings call.

Deleveraging remains a top priority in FY19 and beyond. We remain committed to our target of achieving a Net Debt to adjusted EBITDA ratio of below 4.0x by the end of calendar 2020 and we expect positive free cash flow in the remaining quarters and in FY19. Our liquidity position is substantial, with significant flexibility from over $2 billion of revolver availability.

For earnings history and earnings-related data on Coty (COTY) click here.