Coty Set to Release Q3 Earnings: Key Insights for Investors

Core Viewpoint - Coty Inc. is expected to report a decline in revenues for the third quarter of fiscal 2025, with estimates at $1.3 billion, reflecting a 5.8% decrease from the previous year [1] Revenue and Earnings Estimates - The consensus estimate for earnings has decreased by one cent to 5 cents per share, consistent with the same quarter last year [2] - Coty has experienced a trailing four-quarter negative earnings surprise averaging 65.7% [2] Business Challenges - Coty is facing significant challenges in key markets, including China, Travel Retail Asia, Australia, and Consumer Beauty in the U.S., with expectations of continued pressure into the upcoming quarter [2] - Organic like-for-like revenues are anticipated to decline by 1.5% for the third quarter of fiscal 2025 [2] Currency and Cost Pressures - Currency headwinds are expected to impact results, with a projected foreign exchange headwind of approximately 3% to 4% in the second half of the fiscal year [3] - Increased advertising and consumer promotions (A&CP) spending has been noted, with A&CP costs remaining in the high 20s percentage-wise, which may further affect margins and profitability [4] Strategic Initiatives - Despite challenges, Coty's strategic priorities, such as expanding its prestige fragrance portfolio and enhancing digital and direct-to-consumer capabilities, are expected to support performance and margin resilience [5] Earnings Prediction - The current model does not predict an earnings beat for Coty, with a Zacks Rank of 4 (Sell) and an Earnings ESP of -41.20% [6]