Coty Surges as Economic Reopening Fuels Cosmetics Rebound

(Bloomberg) -- Coty Inc. shares jumped after the cosmetics maker’s profit forecast topped Wall Street’s expectations, buoyed by recovering demand for makeup and fragrances as pandemic restrictions continue to ease.

Adjusted earnings will be in the range of 19 cents to 23 cents a share this year, the company said Monday. That compared with the 18-cent average of analyst estimates compiled by Bloomberg. The company also reported first-quarter sales and profit that topped expectations.

The results show Coty is continuing to recover after pandemic-driven mask-wearing and social isolation hurt makeup sales last year. The company cited “beauty market momentum,” particularly in the U.S. and China, as well as a rebound in sales related to travel.

Coty shares climbed 12% at 9:45 a.m. in New York. They rose 32% this year through Friday’s close. Competitor Estee Lauder Cos. last week reached a record high after its own strong earnings report.

Separately Monday, Coty said it sold an additional 4.7% stake in the Wella business to KKR & Co. in exchange for the redemption of about 56% of KKR’s convertible preferred shares in Coty. The transaction is valued at $216 million. Coty, which still owns 25.9% of Wella, last month sold KKR a 9% stake in the haircare company in a similar deal.

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