Coty ( NYSE: COTY ) shares rose sharply on Wednesday after posting better than expected Q2 earnings results.
For the quarter reported, the cosmetics company notched $0.22 in earnings per share, more than doubling the $0.10 expectation on the Street. Meanwhile, $1.52B in revenue exceeded estimates by $20M. Gross margins expanded 110 basis points to 65.5%, above the 65.1% analyst consensus.
The company noted that while demand for cosmetics remained robust, headwinds from the company’s Russia exit and foreign exchange headwinds adversely impacted results.
"I am incredibly pleased by Coty's tenth consecutive quarter of delivering results inline to ahead of expectations, especially as most quarters surpassed expectations despite the highly complex external environment, with particular pressures this quarter from component shortages and FX,” CEO Sue Nabi said. “Demand for beauty products remains as strong as ever, fueled by consumers' desire for self expression, confidence building, and well-being. We are as confident as ever in our view that beauty remains a structurally attractive category, that will continue to outperform global economic growth.”
Based upon the stronger than expected Q2 results and bullish forecasts, Nabi and her team raised full-year forecasts. The company now expects Supported $0.35 to 0.36 for the full-year, up from the prior $0.23 to $0.33 guide. The analyst consensus had stood at $0.32. The company also anticipates “modest gross margin expansion” as a mid-single-digit pricing increase due to take effect exiting Q3 offsets cost pressures.
Shares of Coty Inc. ( COTY ) rose 4.35% in Wednesday’s premarket trading.
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Coty beats quarterly expectations, raises full-year guide