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Coty Inc. COTY is likely to register a decline in the top line when it reports third-quarter fiscal 2025 earnings on May 6. The Zacks Consensus Estimate for revenues is pegged at $1.3 billion, indicating a decrease of 5.8% from the prior-year reported figure.
The consensus mark for earnings has moved down by a penny in the past seven days to 5 cents per share, which is in line with the year-ago quarter’s reported figure. COTY delivered a trailing four-quarter negative earnings surprise of 65.7%, on average. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)
Coty Price, Consensus and EPS Surprise
Coty price-consensus-eps-surprise-chart | Coty Quote
Things to Know About COTY’s Upcoming Results
Coty has been facing significant challenges across several key areas of its business, including China, Travel Retail Asia, Australia and Consumer Beauty in the United States. On the last earnings call, management highlighted that it anticipates these pressures to persist into the upcoming quarter. We expect organic LFL revenues to decline 1.5% for the third quarter of fiscal 2025.
Currency headwinds are also likely to weigh on the results in the to-be-reported quarter. The company highlighted that it expects to see foreign exchange headwind of roughly 3% to 4% in the second half, which in turn is likely to have affected the third-quarter performance.
In addition, Coty has been experiencing higher advertising and consumer promotions (A&CP) spending for a while now. In the second quarter of fiscal 2025, the A&CP percentage remained in the high 20s, showing a year-on-year rise. With A&CP costs expected to remain at these elevated levels, the continued increase of such expenses, if not carefully managed, might have further weighed on margins and profitability.
Nonetheless, Coty’s strategic priorities are likely to have provided meaningful support to the performance of the quarter to be reported. Key initiatives, such as expanding its prestige fragrance portfolio, strengthening digital and DTC capabilities, and executing cost-saving measures, are expected to have driven consumer engagement and support margin resilience.
Earnings Whispers for COTY Stock
Our proven model does not predict an earnings beat for Coty this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Coty has a Zacks Rank #4 (Sell) and an Earnings ESP of -41.20%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.