Coty shares surge on upbeat outlook

The reopening of borders to foreign travelers as the United States did Monday could fuel sales at duty-free stores, and Coty is counting on that.

The beauty company behind brands like Cover Girl and Kylie Cosmetics raised its forecast for annual earnings, largely topping Wall Street’s estimates. Coty said it’s optimistic for this holiday season as people travel and buy more at duty-free stores.

It’s also betting that consumers will pick up its cosmetics and fragrances as they return to the office and attend parties and social events.

And while it’s grappling with supply chain bottlenecks that have hampered the industry, it’s combatting inflation by cutting costs, boosting prices and launching high-end products.

Investors liked the buffed up outlook, driving Coty’s shares up more than 13% in early trading Monday.

In its latest quarter, the company’s top line rose 22% and revenue from its luxury brands jumped by over a third, prompting Stifel’s analyst to say Coty’s turnaround is “on track.”

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