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Coty Inc Class A - Stock Quote COTY

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Morningstar's Coty Inc Class A Stock Analysis

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Coty's Turnaround Efforts and Post-Pandemic Makeup Recovery Give it a Promising Outlook

Business Strategy and Outlook

| Rebecca Scheuneman, CFA |

Having had three CEOs in two years, Coty's strategic direction has been in limbo, but we are optimistic that Sue Nabi, a successful 20-year veteran of wide-moat L’Oreal who took the reins in September 2020, has the qualifications to right the ship. We think her strategic priorities are on target, as she seeks to increase Coty’s exposure to high-growth markets where it has been underexposed. Specifically, she looks to accelerate Coty's prestige division by expanding from its core fragrance portfolio into makeup, build a skincare portfolio across mass and prestige, enhance its digital capabilities, further penetrate China, stabilize its mass-beauty business, and become an industry leader in sustainability. We are impressed by the progress Coty has realized to date, with improvement in each objective despite the challenges presented by the pandemic, and we expect further progress in the years to come.

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Coty Inc Class A's Company Profile

Business Description

Coty is a global beauty company that sells fragrances (58% of fiscal 2021 revenue), color cosmetics (29%), and skin/body care (13%). The firm licenses brands such as Calvin Klein, Hugo Boss, Gucci, Burberry, and Davidoff for its prestige portfolio. Coty’s most popular color cosmetic brands are CoverGirl, Max Factor, Rimmel, Sally Hansen, and Kylie. Coty also holds a minority stake in a salon and retail haircare business, including brands Wella, Clairol, OPI, and GHD. Francois Coty founded the firm in 1904 and it remained private until its 2013 IPO. It had focused on prestige fragrances and nail salon brands until the 2016 acquisition of Procter & Gamble's beauty business. This nearly doubled the firm's revenue base, and launched it into mass-channel cosmetics and professional hair care.

Contact
350 Fifth Avenue
New York, NY, 10118
T +1 212 389-7300
Sector Consumer Defensive
Industry Household & Personal Products
Most Recent Earnings Mar 31, 2022
Fiscal Year End Jun 30, 2021
Stock Type Slow Growth
Employees 11,430