Coty outperformed in early 2024

American group Coty exceeded expectations in the third quarter of its 2023-24 financial year, which ended at the end of March, in terms of both sales and earnings.

 

As we enter 2024, the beauty market is clearly in fine fettle.

 

After L’Oréal, it was Coty‘s turn to unveil, on May 6, a quarter ending last March (the third of its fiscal year), exceeding expectations.

 

This enabled the American group to raise, for the third time, its targets for the 2023-24 financial year ending June. It now expects LFL sales growth for FY24 to be at the upper end of its previous forecast range of +9 to +11%.

 

Third-quarter sales, up 8% on a reported basis (+10% in constant currencies) to $1.3 billion, thus outperformed the company’s forecasts (+6-8% in constant currencies).

 

A virtuous mix

 

Coty’s adjusted operating income itself rose by 17% to $143.9 million, representing a 90 basis point increase in adjusted operating margin to 10.4%. While adjusted EBITDA rose by 10% to $199.9 million.

 

 

The Group benefited both from “market share gains in the prestige sector” and “strong demand in the beauty sector” at the start of the year.

 

Results ahead of schedule

 

“Our third-quarter results reinforce Coty’s reputation for delivering results ahead of the beauty market and expectations, and illustrate once again that we are implementing our imperative of balanced portfolio growth,” enthused Coty CEO Sue Nabi. “In the third quarter and since the start of the fiscal year, we have recorded strong growth in both Prestige and Consumer Beauty (FMCG), in each of our three regions.”

 

The growth of the Prestige division (+8% and +13% in constant currencies to $867.2 million) is all the more commendable as the loss of the Lacoste license (recovered by Interparfums) had a negative impact of 4%, not to mention a negative impact of 1% due to exchange rates. Coty made up for this with the successful launch of the Burberry Goddess fragrance, and those of the Hugo Boss and Chloé juices, on “a perfume market that is itself already very dynamic” and where the American group continues to “outperform and gain market share”, Laurent Mercier, Coty’s CFO, told Les Echos-Investir.

 

Balanced growth

 

Overall, “in Q3 24 and year-to-date”, the company “continued to record balanced net sales growth, including growth in both Prestige and Consumer Beauty, in all regions and in each of its main categories”.

The Consumer Division grew by 6% on both a reported and constant currency basis, to $518.4 million. Net sales were driven by “color cosmetics, fragrances and skin and body care” in most countries, offsetting “market weakness in cosmetics in the United States”.

 

All markets dynamic

 

Geographically, the US market, which already accounts for 43% of Coty’s sales, was again very dynamic in the third quarter, with an increase of 8% on a reported basis (+11% in constant currencies) to $589 million, thanks to good performances in Latin America, Canada and Travel Retail. In contrast to the Group as a whole, the Consumer division was more buoyant, with double-digit growth on a reported basis than the “Prestige division, posting mid-single-digit growth, partially offset by a 2% negative currency impact”.

 

Coty’s second major market, the EMEA zone (Europe, Middle East, Africa) also maintained a good pace between January and March 2024, with an increase of 7% on a reported basis (+9% in constant currencies) to $628 million (or 45% of the Group’s total sales). Most markets and Travel Retail underpinned this good performance.

 

Prestige division sales triple in China

 

In Asia Pacific, Coty’s smallest market (12% of sales), sales were also up 7% on a reported basis (+11% in constant currencies) to $168.6 million. They were driven by double-digit growth in the Prestige division, partially offset by a 3% negative impact from exchange rates, the dynamic Travel Retail business and double-digit growth in Asia excluding China. In China, Prestige sales almost tripled!

First-quarter highlights for Coty included the announcement, both in February, of a new licensing agreement with Italian fashion house Etro, to produce and distribute its signature fragrance lines and home fragrance collections beyond 2040, and the launch of Infiniment Coty Paris, its ultra-premium fragrance brand.



To continue reading this article, subscribe or log in to your account

Discover our plans

Subscribe for 1€

Become an active member of the community of luxury leaders.


Read also > COTY UNVEILS INFINIMENT COTY PARIS, ITS FIRST PRESTIGE FRAGRANCES

Featured Photo: © Infiniment Coty Paris

Picture of Sophie Michentef
Sophie Michentef
Sophie Michentef has worked for more than 30 years in the professional press. For fifteen years, she managed the French and international editorial staff of the Journal du Textile. She now puts her press, textile, fashion, and luxury expertise at the service of newspapers, professional organizations, and companies.

Subscribe to our Newsletter

Sign up now to receive sneak previews of our programs and articles!

Launch offer:

Your participation in the Camille Fournet Masterclass reserved for annual subscriber !

Luxus Plus Newsletter