Executive Summary
Coty delivered QQ4 2024 revenue of USD 1.3634 billion, a marginal YoY uptick of 0.87% but a sequential decline of 1.60%, underscoring ongoing volatility in the prestige and mass beauty channels. Gross profit stood at USD 827.6 million with a robust gross margin of roughly 60.7%, indicating healthy product mix and pricing power at the gross level. Yet the company reported a net loss of USD 96.9 million for the quarter, with earnings per share of -0.12, driven by elevated operating expenses and net financing items that muted operating profitability despite a positive EBITDA of USD 52.1 million and an operating income of USD 36.4 million.
The cash flow profile shows resilience: operating cash flow of USD 176.5 million and free cash flow of USD 116.7 million, aided by disciplined working capital management. However, leverage remains a meaningful constraint, with total debt of USD 4.2637 billion and net debt around USD 3.943 billion against a relatively modest cash balance of USD 320.6 million. The balance sheet exhibits a sizable investment in intangible assets and goodwill (Goodwill and Intangibles ~ USD 7.471 billion), which underpins Coty’s brand-led model but also contributes to elevated leverage metrics.
Looking ahead, the near-term focus is on managing profitability through SG&A discipline, optimizing the brand portfolio, and leveraging cash generation to reduce debt while continuing to invest in high-potential fragrance, color cosmetics, and skincare categories. Management commentary (where available) emphasizes execution on brand mix and efficiency; however, the current period remains challenged by a negative net income trajectory and limited margin expansion. Investors should monitor: (1) progression toward sustainable operating margins and free cash flow generation, (2) deleveraging pace given high debt burden, and (3) strategic actions to accelerate growth in e-commerce and geographies with durable demand for prestige beauty products.
Key Performance Indicators
QoQ: -53.21% | YoY:-71.78%
QoQ: -2 650.00% | YoY:-394.53%
QoQ: -2 890.70% | YoY:-445.82%
Key Insights
Revenue: USD 1,363,400,000; YoY +0.87%, QoQ -1.60%
Gross Profit: USD 827,600,000; Gross Margin 60.70%; YoY -2.58%, QoQ -7.82%
EBITDA: USD 52,100,000; EBITDA Margin ~3.82%
Operating Income: USD 36,400,000; Operating Margin 2.67%; YoY -71.78%, QoQ -53.21%
Total Other Income/Expenses Net: USD -142,100,000
Income Before Tax: USD -107,400,000; Pre-tax margin -7.88%
Income Tax Expense: USD -11,800,000 (tax benefit)
Net Income: USD -96,900,000; Net Margin -7.11%
Earnings Per Share (Diluted): -0.12; Wei...
Financial Highlights
Revenue: USD 1,363,400,000; YoY +0.87%, QoQ -1.60%
Gross Profit: USD 827,600,000; Gross Margin 60.70%; YoY -2.58%, QoQ -7.82%
EBITDA: USD 52,100,000; EBITDA Margin ~3.82%
Operating Income: USD 36,400,000; Operating Margin 2.67%; YoY -71.78%, QoQ -53.21%
Total Other Income/Expenses Net: USD -142,100,000
Income Before Tax: USD -107,400,000; Pre-tax margin -7.88%
Income Tax Expense: USD -11,800,000 (tax benefit)
Net Income: USD -96,900,000; Net Margin -7.11%
Earnings Per Share (Diluted): -0.12; Weighted Avg Diluted Shares: 867.9 million
Free Cash Flow: USD 116,700,000; Operating Cash Flow: USD 176,500,000; Capital Expenditures: USD -59,800,000
Cash at End of Period: USD 320,600,000; Total Debt: USD 4,263,700,000; Net Debt: USD 3,943,100,000
Current Ratio: 0.76; Quick Ratio: 0.46; Cash Ratio: 0.12
Days Sales Outstanding: ~31.8 days; Days Inventory Outstanding: ~128.4 days; Days Payables Outstanding: ~236.1 days; Cash Conversion Cycle: ~-76.0 days
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.36B |
0.87% |
-1.60% |
| Gross Profit |
827.60M |
-2.58% |
-7.82% |
| Operating Income |
36.40M |
-71.78% |
-53.21% |
| Net Income |
-96.90M |
-394.53% |
-2 650.00% |
| EPS |
-0.12 |
-445.82% |
-2 890.70% |
Key Financial Ratios
operatingProfitMargin
2.67%
operatingCashFlowPerShare
$0.2
freeCashFlowPerShare
$0.13
dividendPayoutRatio
-3.41%
priceEarningsRatio
-21.85
Management Commentary
Note: The earnings transcript is not provided in the input data. Consequently, no direct management quotes or transcript-derived themes are available. The following highlights synthesize what investors typically look for relative to the disclosed results:
- Strategy and portfolio optimization: Management often emphasizes brand mix optimization and focus on higher-growth prestige segments.
- Margin discipline and cost control: The discrepancy between strong gross margins and negative net income suggests SG&A and other financing costs are a critical driver of profitability; the emphasis is typically on SG&A efficiency and cost synergies.
- Cash flow and deleveraging: Positive operating cash flow and free cash flow indicate cash generation capacity; the central question is the pace of debt reduction given elevated leverage.
Transcript not provided in the supplied data.
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Transcript not provided in the supplied data.
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Forward Guidance
Based on QQ4 2024 results, Coty continues to operate with meaningful leverage despite positive cash flow generation. The lack of explicit forward guidance in the provided data requires a cautious stance. Key factors for outlook include: (1) the trajectory of gross margin stability versus SG&A acceleration, (2) currency headwinds and commodity costs affecting cost of goods sold and marketing spend, (3) growth in e-commerce and high-potential categories (fragrance, prestige color cosmetics, skincare), and (4) progress on deleveraging and any restructuring-related cost savings. Our assessment suggests a measured path to margin stabilization could be achievable if SG&A discipline and brand portfolio optimization materialize together with sustained cash flow generation. Potential targets to monitor include: operating margin expansion from the mid-2% range toward the low-to-mid single digits, an ongoing positive free cash flow run-rate, and a debt reduction trajectory that improves net leverage over the next 4-8 quarters.