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Why Coty Inc. Stock Jumped 21% Thursday

What happened

Shares of Coty (NYSE: COTY) jumped as much as 21.2% Thursday, following the beauty products company's first-quarter results for fiscal 2018. The stock is up about 15% at the time of this writing.

The stock's rise likely reflects the quarter's better-than-expected profit. Coty's adjusted earnings per share for the quarter were $0.10. On average, analysts were expecting adjusted EPS of $0.07. Revenue of $2.24 billion was in line with analysts' consensus estimate for the quarter.

Image source: Getty Images.

So what

Coty's revenue of $2.24 billion and adjusted EPS of $0.10 compare to $1.08 billion and $0.23 in the year-ago quarter, respectively. Excluding the favorable impact on revenue of Coty's acquisitions of hair-care line ghd and cosmetics company Younique, Coty's organic revenue during the quarter was down 2% year over year in constant currency.

The quarter comes after a worse-than-expected fourth quarter that sent shares plummeting in August.

"Q1 was a much better quarter," explained Coty CEO Camillo Pane. "We saw strong growth in Luxury, continued positive momentum in Professional and a reduced net revenue decline in the Consumer Beauty division."

What now

Looking ahead, Pane expects quarter-to-quarter results to be "uneven." But he said that the company's improving revenue trends gave him confidence in the company's growth strategy, which he says is "moving Coty gradually onto a path of full recovery."

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.