THE WHAT? Coty has reported better-than-expected Q1 revenue, bolstered by faster growth in its mass-market division, which grew 12 percent YOY.
THE DETAILS The increase beat the prestige arm, which rose 7 percent, with the mass-market win highlighting a change from the prior quarter, where the luxury arm reported a higher increase.
Q1 revenue reached US$1.39 billion, higher than the US$1.38 billion predicted by Bloomberg analysts.
According to Coty, “Revenue growth in cosmetics and mass fragrances was broadly in-line to ahead of sell-out, the division was boosted by a strong launch pipeline and brand initiatives in its bodycare business, including adidas’ Skin & Mind premium and sustainable bodycare range, Monange’s silicone-free deodorant, and Bozzano’s clinical range.”
Geographically, EMEA like-for-like sales grew 11 percent, boosted by ‘significant travel retail momentum and double digital growth across most markets”, while Americas saw strong momentum in Brazil and Latin America.
The ‘continued strength’ in the U.S. was counter-balanced by supply constraints. Asia Pacific grew 12 percent YOY.
THE WHY? Sue Y. Nabi, Coty’s CEO, said: “Our strong Q1 results, in the midst of a complex external environment including ongoing component shortages, confirm the strength and resilience of Coty’s brands, teams, strategy and operating model. This represents the ninth consecutive quarter of Coty reporting results in-line to ahead of expectations. The progress we continue to make should be evident across all key financial KPIs, from sales to gross margins and adjusted EBITDA to our deleveraging progress.
“While Coty has certainly benefited from a resilient beauty category, I am particularly pleased that our balanced growth strategy remains in full force. We delivered robust growth across all of our regions, each of our key categories including fragrances, cosmetics, skincare and bodycare, and across both divisions. This has allowed us to again report sales growth well above the underlying beauty market and among the best in our competitive set.”