While its earnings were heavily impacted by the termination of its Lacoste license, the American perfume and cosmetics specialist posted double-digit sales growth in fiscal 2023-24, which closed at the end of June.
Coty ended its 2023-2024 fiscal year…on a high note!
The American group, Europe’s No. 2 in fragrances, has just published the enviable performance of its latest fiscal year, ending last June.
Unlike other beautygiants, such as compatriot Estée Lauder (which has just announced declining 2023-2024 results and the departure of its CEO) and France’s L’Oréal, the world’s No.1, Coty was not adversely affected by the difficulties of the Chinese market.
As Laurent Mercier, the Group’s CFO, told Afp, Coty generates only 3% to 4% of its sales in the Middle Kingdom…
“A very good year
Laurent Mercier also described this final 2023/2024 financial year as “a very fine year”.
More concretely, Coty’s net sales rose by 10% on a reported basis (+11% on a like-for-like basis), to $6.1 billion (€5.5 billion), better than analysts’ estimates. Coty also argues that this “corresponds to the upper end” of its own “forecast range” and that it “outperformed the global beauty market, which grew by around 9%.”
Net profit, however, fell to $76.2 million (€69 million), 6.5 times less than before! In addition to an accounting effect linked to the fall in the Group’s shares, Coty was hit by an unfavorable basis for comparison. Last year, the sale of the Lacoste license to its competitor Interparfums and the sale of its shares in the Wella group had had a positive and short-lived impact on profits.
Historic launch for Burberry Goddess
However, Laurent Mercier pointed out to Afp that this impact of the Lacoste license had been offset, in terms of sales, by other activities “notably in the Prestige section, where Burberry Goddess was Coty’s biggest success in the history of the group in terms of fragrance launches”.
In more detail, sales growth was driven bythe Prestige division (+14% like-for-like), and, to a lesser extent, by the Consumer division (+6%). Both were driven by “growth in fragrances, cosmetics and skincare”.
Geographically, all regions performed well, with high single- and double-digit sales growth for the full 2023-24 financial year.
Driven by “many European markets, African markets and the Travel Retail channel”, EMEA sales growth was 11% on a reported and comparable basis for the full year. However, growth slowed to 1% on a reported basis and 5% on a comparable basis in the fourth quarter.
More difficult fourth quarter
Driven by Latin America, Canada and the Travel Retail channel, the Americas grew by 10% as reported (12% on a comparable basis). However, they changed tempo (+3% reported and +8% like-for-like) in the fourth quarter.
Lastly, net sales in Asia-Pacific, boosted by double-digit growth in Asia excluding China and by the regional retail channel, rose by 9% as reported (+11% on a comparable basis) over the full 2023-24 financial year. In the fourth quarter, however, net sales fell by 4% as reported and 2% on a comparable basis.
After this good year, Coty is relatively cautious for the next. Indeed, the group is expecting like-for-like sales growth of 6-8% in fiscal 2024-25, slightly less than the 11% in 2023-24.
“We are confident in our ability to deliver another year of growth in line with our medium-term objectives,” said Coty CEO Sue Nabi.
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