Klaus Vedfelt/DigitalVision via Getty Images Synopsis Coty Inc. ( NYSE: COTY ) is one of the largest beauty companies in the world and owns a portfolio of renowned brands. COTY’s historical financials have demonstrated strong top-line growth.
Additionally, its profitability margins over the same period expanded annually as well. For its most recent quarter, it continues to report net revenue growth driven by growth in both of its reportable segments. Currently, both prestige and mass beauty channels have been growing strongly, with prestige reporting higher year-over-year growth.
COTY has been focused on accelerating its prestige division in order to capture this growth. Therefore, this initiative to expand on high-growth prestige products is expected to capture market share and drive growth. Apart from growing its top line, COTY is also committed to reducing its debt levels.
By 2025, it is expected that leverage will be reduced to approximately 2x through EBITDA expansion. In addition, its 2025 free cash flow is expected to grow as well. Overall, I am recommending a buy rating for COTY.
Historical Financial Analysis Author's Chart Over the last three years, COTY’s top line has shown consistent growth. In 2021 , its reported net revenue was approximately $4.63 billion.
In 2022 , net revenue grew to $5.3 billion. 2022’s strong growth was attributed to store reopening and an increase in leisure travel as a result of loosened COVID restrictions.
Both its prestige and consu.