Coty's Sales Environment Weakness Will Persist

Summary

• Coty's global manufacturing footprint is relatively insulated from tariffs' direct impact. Material costs will still likely see a notable increase from the 54% total tariff on China.
• The sales environment will likely remain weak for Coty. Tariffs add uncertainty to global spending power. Coty's sales have already been weak, due to slow sales in China and the Americas.
• Cost savings should mitigate a good amount of the weak sales environment's earnings impact.
• I estimate Coty to have a fair value of $5.25, not suggesting a buying opportunity yet.

Flashpop

Coty Inc. (NYSE:COTY), the global beauty product manufacturer and seller, has uncertain earnings prospects ahead. Although the company has US manufacturing to mitigate tariffs’ direct impact, Coty still sources materials from China, now likely to see significant price increases from the recently

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.