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Coty’s Reported and Adjusted Operational Margins: What Happened?
Coty (COTY) reported a decline in its gross margin in 4Q16 as well as fiscal 2016. The reported gross margin came in at 56.7% for 4Q16.
Beauty Companies Are Pursuing Digital Initiatives
Beauty companies continue to expand into a multi-pronged digital strategy that encompasses e-commerce, m-commerce, as well as digital and social media.
How Coty’s Brazilian Acquisition Impacted Its Operating Margin
Coty (COTY) reported a fall in its gross margin in fiscal 3Q16. Its reported gross margin came in at 61.2% in fiscal 3Q16 compared to 62.3% in fiscal 3Q15.
Estée Lauder’s Growth Initiative: Leading Beauty Forward
With increasing competition from L’Oréal, Shiseido, and Coty, Estée Lauder continues to expand its position in Western Europe and emerging markets.
Estée Lauder’s Makeup Segment Boosted Its Operating Income
Estée Lauder’s makeup segment’s net revenue rose 7.3% in reported terms and 11% in constant currency terms to $1.2 billion in fiscal 3Q16.
Will Coty’s Stock Price Rise after Its Fiscal 3Q16 Results?
Coty was trading at $29.80 on April 25, 2016. Its stock price has risen 45.9% since January 2, 2015, and 19.3% year-to-date.
Favorable Valuation Multiples for Beauty Companies in 4Q15
Beauty companies are trading at higher valuations relative to the S&P 500 Index (SPY) and the Dow Jones Industrial Average (DIA).
Why Did Beauty Companies’ Operating Margins Shrink in 4Q15?
Beauty companies have been investing heavily in growth initiatives, which is impacting their margins.
How Did Beauty Companies’ Revenues Shape Up in 4Q15?
Beauty companies’ revenues for 4Q15 conveyed mixed signals to investors. Although Procter & Gamble and Avon started the earnings season on a disappointing note with lower sales, Estée Lauder and Coty beat consensus Wall Street estimates.
Why Does Coty Use Acquisitions to Expand Geographically?
Coty (COTY) markets its beauty and cosmetic products in more than 130 countries and territories. Coty derives its revenue from three geographical regions.
Coty Could See Greater Revenue and Hence Higher Margins
Let’s discuss Coty’s margins. It reported a slight improvement in the adjusted gross margin in fiscal 1Q16. This adjusted gross margin rose 70 basis points.
Coty’s Growth Barriers: Weaknesses and Threats
A limited distribution strategy led to Coty’s high reliance on specific channels or departments for specific products. Coty faces stiff competition from established luxury brands and local regional brands.
