Coty Inc (0I4A.L) Q4 2024 Earnings Report

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.