Coty’s stock looks attractive here

Manufacturer of cosmetics and perfumes Shares of Coty, Inc. (NYSE: COTY) suffered with benchmarks trading down more than (-30%) over the year. The company is the leading perfume manufacturer with high-end brands such as Hugo Boss, Burberry, Mark Jacobs and Gucci in its portfolio. It also has the iconic Cover Girl branding. Pandemic shutdowns and the work-from-home trend boosted demand for makeup and fragrances, but bolstered skincare products. As the reopening continues and people once against engage with each other person-to-person socially and professionally, demand has recovered. The company continued to see growth in its fiscal third quarter 2022 results with revenue growth of 15.4% and an increase in its EPS guidance for the year. Travel retail, the United States and Europe generated strong sales momentum, with the prestige and consumer beauty segments leading with sales performance. E-commerce sales growth was double digit and the Company continues to increase its presence on social media platforms. Its products continue to be the fastest growing leading prestige business in China despite the flat market backdrop. Fragrances are a market tailwind in the face of inflationary pressures and supply chain pressure. Cautious investors looking for a value play in the cosmetics and fragrance market can watch for opportunistic pullbacks in Coty shares to build a position. – MarketBeat

Publication of results for the third quarter of fiscal 2021

On May 9, 2022, Coty released its fiscal third quarter 2021 results for the quarter ending March 2022. The company reported adjusted earnings per share (EPS) of $0.03 excluding one-time items over consensus estimates. analysts for a profit of $0.01, beating estimates of $0.02. Revenue rose 15.4% year-over-year (YOY) to $1.19 billion, beating analyst estimates of $1.15 billion. Sales momentum was strong, driven by both the US and Europe, as well as travel retail. Coty CEO Sue Nabi commented, “Our third quarter results mark the seventh consecutive quarter that Coty has reported results in line with expectations. I am extremely proud that the organization has achieved these results and outperformed the entire beauty market, in an increasingly volatile environment. This confirms that Coty has the brands and the people to win in the beauty market, guided by our strategic priorities of driving above-market sales growth and increasing gross margin, enabling brand reinvestment, earnings expansion and continued deleveraging. »

Raised guide

Coty raised its full-year 2022 EPS guidance to between $0.23 and $0.27 from analysts’ estimate of $0.27, including $0.01 of net separate tax benefits .

Takeaways from the conference call

CEO Sue Nabi provided color on the performance. Strength was found in its Consumer Beauty segment as it continued to gain global market share for the 5e consecutive month. Adidas’ repositioning is on track for late summer 2022. Its Prestige Brands cosmetics continue to perform well with brands such as Gucci Beauty, Burberry and Kylie. The skincare footprint continues to improve as Lancaster does well in China with its iconic 365 serum becoming the SKU hero of its portfolio. Its CoverGirl brand makes its very first entry into the skincare market. The premiumisation of its Prestige and Consumer Beauty continues with price increases to protect its margins, retain talent and maintain its flexibility with its supply chain.
Coty Stock looks attractive here

COTY Opportunistic Withdrawal Levels

Using rifle charts over the weekly and daily timeframes provides an accurate view of the landscape for the COTY stock. The weekly Rifles chart peaked near $11.08 Fibonacci level (fib). COTY triggered a post-spiking breakdown by crossing the weekly 50-period moving average (MA) at $8.72 and the weekly 200-period MA at $8.67 towards its lower weekly Bollinger Bands (BB) at 6, $03. The lower weekly 5-period MA is at $7.04, followed by the 15-period MA at $8.13. The weekly stochastic has fallen below the 20 band but is stuck for a cross return or a mini reverse return. The weekly weak market structure (MSL) buy triggers above $7.36. The daily rifle chart has a breakout when the 5-period MA at $6.44 crossed the 15-period MA at $6.40 and the stochastic has a mini pup through the 30 band. The daily 50-period MA sits at the fib of $7.86 and the daily upper BBs at $8.31 with the daily 200-period MA at $8.73. Cautious investors can look for opportunistic pullback levels at the $6.47, $6.19 fib, $5.87 fib, $5.57, $5.26 fib, $4.90 fib and 4.64 levels. $ fib. The upward trajectories are from the $8.20 level to the $11.08 fib level.

James T. Quintero