Coty sees third-quarter lift from prestige fragrances and consumer beauty

(Image credit: Marc Jacobs).

08 May 2024 --- Coty releases its results for the third quarter of fiscal year 2024, highlighting growth in net revenues of 8% to US$1,386 million on a reported basis and 10% on a like-for-like basis, with these results supported by growth in fragrances, color cosmetics, skin care and body care.

On a year-to-date basis, net revenues grew 13% on both a reported and like-for-like basis.

Sue Nabi, Coty’s CEO, highlights that subdued trends in a few markets and subcategories, such as US mass cosmetics, are “more than offset by continued strong momentum” in the majority of Coty’s core business areas.

These driving business areas include its global Prestige segment and mass fragrances, where the company saw business grow by a low-double-digit percentage, as well as in prestige cosmetics, where sales grew over 20%.

“In fact, in Prestige fragrances, we’ve seen category growth trends accelerate over the course of the quarter, speaking to the continued appeal of fragrances to a broad set of consumers,” continues Nabi.

“And in this favorable backdrop, Coty is gaining prestige fragrance market share across regions.”

Growth in Prestige and Consumer beauty
The multinational beauty house highlights growth in both Prestige and Consumer Beauty across all regions and in each of its core categories. This was partially offset by a 2% headwind in Q3 from the divestiture of the Lacoste license.

Among spring Coty launches, Kylie Jenner debuted her Cosmic Kylie Jenner perfume (Image credit: Kylie Cosmetics).Reported net revenue growth in Prestige remained strong in fragrances, cosmetics and skin care, but Q3 included a 4% negative impact from the divestiture of the Lacoste license and a 1% negative impact from foreign exchange.

On a year-to-date basis, Consumer Beauty revenues increased 8% on a reported basis and 7% on a like-for-like basis.

Consumer Beauty’s reported net revenues grew in color cosmetics, mass fragrances and mass skin and body care in most countries, offsetting the market weakness in US mass cosmetics.

Coty’s global Travel Retail trends were robust in all three regions, fueling reported net revenue growth of roughly 20% in Q3. In China, Coty’s Prestige business reported net revenue growth in the mid-teens percentage.

Blockbuster fragrance launches
Coty highlights its “blockbuster launch” last fall of Burberry Goddess, which continues to perform as a top global female fragrance launch. Coupled with strong growth in other Burberry franchises, this drove over 50% of Burberry’s total net revenues in Q3.

Burberry Goddess “continues to grow and exceed all prior Coty benchmarks,” alongside the current spring launches of Marc Jacobs Daisy Wild and Cosmic Kylie Jenner, which are dubbed the number one and number two fragrance launches in the US calendar year-to-date, respectively.

“In our color cosmetics business, first-to-market innovations like CoverGirl’s Simply Ageless Skin Perfector Essence and Rimmel’s Wonder’Bond mascara are resonating with consumers, while both brands are making strong strides in accelerating their advocacy across social media platforms,” details

“Both CoverGirl and Rimmel now rank in the top four in terms of earned media value in their core markets of US and UK, respectively, which is a significant improvement from last year.”

This quarter marked a “major milestone” in the launch of Coty’s own-branded Infiniment Coty Paris fragrance collection. “As we build both Infiniment Coty Paris and our leading ultra-premium fragrance collections, we look to capture a bigger slice of the booming ultra-premium fragrance market,” says Nabi.

Skin care brands accelerate
Coty’s reports accelerated momentum in skin care, particularly in Lancaster Beauty across both Europe and China, alongside “growing productivity” for Orveda and “strong momentum” in Philosophy’s social media resonance.

“Our growth is further reinforced by our strong e-commerce momentum with our online sales expanding approximately 20% in both Q3 and fiscal year-to-date and now accounting for one fifth of our business,” highlights Naby.

“I am particularly proud of our market share expansion in this critical channel, with share gains in both Prestige and Consumer Beauty.”

Burberry Goddess, launched last fall, continues to perform as a top global female fragrance launch (Image credit: Burberry).Coty’s prestige cosmetics business saw very strong momentum, with reported net revenue growth of over 25% in the quarter, led by its three prestige cosmetics brands, Burberry, Kylie and Gucci.

Coty’s high-single-digit growth in developed markets was complemented by over 20% like-for-like expansion in growth engine markets, including Brazil, the rest of LATAM, Southeast Asia, including India and Africa.

“We are achieving these strong results and milestones all while delivering robust profit growth and margin expansion,” says Nabi. “This is enabling us to raise the midpoint of our FY24 guidance for the third time this year.”

Coty partnership with Lena Gercke
Coty also announced this week that it has signed a long-term license agreement with Lena Gercke to develop, produce and distribute LeGer’s debut fragrance.

This agreement marks the beginning of a long-term partnership between Coty and German Television Presenter and Model, Lena Gercke.

“We are delighted to be collaborating with Lena Gercke to bring our shared vision to life in the beauty space. Lena’s fashion brand LeGer is one of the fastest-growing personal fashion labels in Germany, creating unique yet timeless pieces that empower women through fashion,” says Stefano Curti, Coty’s chief brands officer of Consumer Beauty.

“Together, we are excited to work with Lena in building her presence in the beauty market with a fragrance that is authentically her.”

By Benjamin Ferrer

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