What happened

Shares of Coty (COTY 0.09%) were moving higher today after the cosmetics company updated investors on its growth acceleration strategy this morning, taking another step forward in its turnaround.

The stock finished the day up 7.7%.

The actress Zendaya putting on makeup

Image source: Coty.

So what

At an investor event, the company outlined six strategic priorities to drive its turnaround, deliver long-term profit growth, and deleverage its balance sheet.

Those include stabilizing its consumer and mass market brands, refreshing the CoverGirl brand to appeal to a broader customer base, creating a comprehensive skincare portfolio, accelerating growth in its prestige beauty business in China, increasing e-commerce growth, and becoming a leader in sustainability.

The company also reaffirmed its current financial guidance, saying it expects adjusted EBITDA of $750 million and revenue of $4.5 billion to $4.6 billion despite challenges from the pandemic. It also it would lower its debt/EBITDA ratio to 5 times by the end of the calendar year. 

CEO Sue Nabi said, "Our performance will be supported by a purpose-led and highly focused portfolio: anchored in luxury with highly desirable brands and delivered through innovative omnichannel activations."

Now what

Coty shares have tripled in the last six months as investors are buying into the company's turnaround after it sold a majority stake in Wella, its professional hair care brand, to KKR for $2.5 billion. That helped the company pay down debt and sharpen its focus on its struggling consumer business. Coty also acquired a 20% stake in Kim Kardashian's beauty business, following an earlier partnership with Kylie Jenner, aligning its brand with two of the most followed women on social media.

The company still has long way to go to make a full recovery, but the economic reopening should also help lift sales in the second half of the year.

Investors can expect to hear more when the cosmetics company reports third-quarter earnings on May 10. Analysts expect revenue to decline 31% to $1.05 billion, and break-even earnings per share on the bottom line.