The Beauty Giant Remains Optimistic on American and Chinese Markets Despite Slowdown from Competitors
While other beauty and luxury companies have expressed concerns about a possible slowdown in the North American and Chinese prestige markets, industry giant Coty Inc. displayed confidence in the performance of the same sector. The company indicated its positive outlook isn’t limited to fragrances, despite this being a top-performing product line for them.
In a discussion on Coty’s latest earnings, CEO Sue Nabi remarked that though Prestige fragrance continues to reign as the ‘queen’ category with surging sales of products like Burberry Goddess, Marc Jacobs Daisy Wild, and Cosmic Kylie, prestige color cosmetics and skincare were faring well too.
“The famous fragrance index continues to be fully at play, not just in the U.S., but globally. People are falling in love with fragrances like never before, even in Europe and emerging markets,” Nabi stated.
She added, “We’re also igniting growth engines for the future. I’m thinking about prestige color cosmetics. We had a fantastic year here thanks to Kylie Cosmetics, which is doing great. Prestige skincare, though facing challenges in some markets like China, is showing growth. Starting from a low base, prestige skincare equity is growing, boasting double-digit growth, largely credited to the revival of Lancaster.”
Coty’s fiscal 2024 total revenues increased by 10 percent to $6.1 billion. The prestige segment enjoyed a 13 percent boost with fragrances generating a 10 percent spike in sales. The consumer division increased by 6 percent.
However, fourth-quarter results failed to meet Wall Street projections. Coty posted a net revenue of $1.36 billion for the quarter ending June 30, slightly below the anticipated $1.37 billion. Prestige net revenue remained flat during the fourth quarter.
The full-year adjusted net income was $323.1 million, a decrease from $457.9 million reported in the prior year. This dip was attributed to the negative impact from the mark-to-market on the equity swap caused by the stock price slump in fiscal 2024 and during the fourth quarter.
Adjusted diluted earnings recorded a loss of 3 cents, falling short of anticipated growth of 5 cents.
Looking ahead to fiscal 2025, Coty projected its core business would grow in alignment with its mid-term target range of 6 to 8 percent like-for-like.
CEO Nabi said, “Looking to FY25, we expect our financial results to be consistent with our medium-term algorithm, with our FY25 outlook further reinforced by our white space opportunities, our robust commercial plans, and the strength of our innovation pipeline, including Burberry Goddess Intense.”