THE WHAT? Coty has announced a further quarter of improvement in its financial performance. For the three months ended September 30, 2021, revenues increased 22 percent (reported), above guidance, thanks to a combination of growth in both e-commerce and bricks and mortar outlets.
THE DETAILS The US beauty behemoth said that its Prestige unit delivered superior 35 percent reported growth in the quarter thanks to strongly increased prestige fragrance sales across all brands. At the same time, prestige make-up sales more than doubled year-on-year, led by Gucci make-up and the relaunch of Kylie Cosmetics.
Consumer Beauty revenues inched up a more modest 4 percent, with CoverGirl delivering a stand-out performance and Rimmel and Mac Factor showing solid progress.
THE WHY? Sue Y. Nabi, Coty’s CEO, commented, “Our objective coming into fiscal 2022 was to build on the great results we delivered last year and further execute on our strategic growth pillars. I am very pleased to say that we are off to a great start, building upon our success. Q1 marks the fifth consecutive quarter of Coty delivering results inline to ahead of expectations. Importantly, our Q1 results exemplify the virtuous cycle that we have been working to create, where our strong topline performance coupled with sustained gross margin expansion and cost initiatives, fuel both profit expansion and targeted re-investments to support future growth…
“Importantly, even as we tracked industry-wide headwinds ranging from select component shortages, supply chain bottlenecks, and inflationary pressure in materials and freight, the strength of our business model and the agility of our teams allowed to us to exceed our sales guidance and deliver nearly 500 bps of gross margin expansion. We feel confident about our prospects for the remainder of the year and we are therefore raising our FY22 sales outlook to low-to-mid teens growth from our previous guidance of low teens growth.”