Coty (NYSE: COTY) reported Q2 EPS of $0.17, $0.06 better than the analyst estimate of $0.11. Revenue for the quarter came in at $1.58 billion versus the consensus estimate of $1.61 billion.

GUIDANCE:

Coty sees FY2022 EPS of $0.22-$0.26, versus the consensus of $0.26.

• The strong sales and sell-out momentum in 1H22, extending through January with LFL sales growth of +13%, reinforces Coty's confidence that FY22 LFL sales will be at the upper end of its guidance range of low-to-mid teens percentage growth. Based on current FX rates, Coty expects a headwind of 3-4% to its reported sales in 2H22.
• The Company continues to expect FY22 adjusted of EBITDA of $900 million at a minimum, on a constant currency basis, as Coty navigates the inflationary environment while intentionally reinvesting gross margin gains and costs savings in its brands to maximize value and fuel sustained topline growth. This reflects strong EBITDA margin expansion YoY. Based on current FX rates, Coty expects a negligible FX impact to its FY22 adjusted EBITDA outlook, as FX benefits in 1H22 are offset by FX headwinds in 2H22.
• With the strong Q2 EPS delivery, Coty raises its FY22 adjusted EPS guidance to $0.22-0.26, up from its previously guided range of $0.20-0.24. The FY22 adjusted EPS guidance includes approximately 1 cent of net discrete tax benefits expected for the year.
• In addition, the Company continues to target leverage of approximately 4x exiting CY22. Given Wella has completed a refinancing of its existing debt in order to fund a shareholder distribution, the expected $175 million distribution from Wella represents a strong contribution towards this target. Coty continues to target leverage of approximately 2x exiting CY25.

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