The cosmetics and perfumery group Coty delivered a turnover above expectations, thanks to a strong demand, especially in the United States.
Coty Group reported fiscal fourth-quarter sales of $1.17 billion, compared with a consensus of $1.15 billion, and sales were up 10 percent from a year earlier. Net loss from continuing operations was $286 million, compared to a $221 million deficit a year earlier. Loss per share was 34 cents, compared with 29 cents in the comparable period last year. Revenues and profits for fiscal year 2023 are expected to grow, “in line with our medium-term objectives”, the group said.
A proven model
Growth was seen across all channels, bucking some of the trends seen by rivals such as Estée Lauder Companies, which saw a decline in sales in China in the fourth quarter.
“The beauty category shows no signs of slowing down, especially in prestige, but also in the high-end [products] that are part of [our] Consumer Beauty division. It’s clear that consumers are choosing high-end more than ever, which is a surprise in the midst of this inflationary pressure,” said Sue Nabi, CEO of Coty Inc, during a conference call on the group’s results.
Beauty sales were up 7% as reported and 8% on a like-for-like basis. Coty saw double-digit growth in nearly all EMEA markets, and travel retail sales doubled thanks to category expansion and the group’s premium strategy.
This is partly due to the “lipstick effect”. Indeed, Americans tend to turn to cosmetics and fragrances to fight the inflation blues.
However, even with positive growth, Sue Nabi told Reuters that the company will make further price increases this year, after an initial round of hikes in early 2022, to boost profit margins.
“The quarterly results continue to confirm that Coty’s renaissance path is largely independent of macroeconomic issues and is supported by a resilient beauty category and steady execution,” writes Jefferies analyst Stephanie Wissink.
Read also > Coty and Estée Lauder maintain quarterly sales thanks to the “lipstick effect”
Featured photos : © Dennis Stenild
