Shares of Coty Inc. climbed 1.8% in afternoon trading Tuesday, after the beauty products company’s fiscal first-quarter profit that met expectations but as gross margin that expanded and revenue that topped forecasts, as “consumer demand for beauty products, particularly prestige fragrances, remained robust.” Net income for the quarter to Sept. 30 rose to $125.3 million, or 15 cent a share, from $103.0 million, or 13 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share rose to 11 cents from 8 cents, which matched the FactSet EPS consensus of 11 cents. Revenue grew 1.3% to $1.39 billion, just above the FactSet consensus of $1.37 billion, as revenue from consumer beauty increased 5% and from prestige fell 1%. Unfavorable currency translation acted as a 7% drag on revenue. Gross margins increased by 0.70 percentage points to 63.9%, despite the heightened inflationary environment and increased contribution from the lower-margin bodycare business. Looking ahead, the company affirmed its fiscal 2023 adjusted EPS guidance of 32 cents to 33 cents, and said it still expects “modest” gross margin expansion in the second quarter and full fiscal year. The stock, which was headed for the highest close since Sept. 23, has lost 6.0% over the past three months while the S&P 500 has shed 7.4%. (This updates an earlier item after FactSet changed its EPS consensus to 11 cents from 12 cents.)Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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