THE WHAT? Coty has reported a Q3 2021 fall of 3.3 percent as European lockdowns dented sales of its beauty products.
THE DETAILS Revenue from continuing operations on a reported basis fell from $1.06 to $1.03 billion year on year, with COVID-19 restrictions in certain parts of Europe, such as the UK and France, weakening demand of products.
Regionally, Americas net revenue fell 6 percent to $409.6 million, hampered by ‘softness’ in the color cosmetics market, while U.S. prestige sales showed strong growth across fragrances, cosmetics and skincare. E-commerce sales rose 50 percent.
EMEA net revenues declined 7.8 percent YOY, with both mass and prestige hit by COVID-19 implications. However, online sales grew nearly 90 percent. Asia Pacific net revenues rose 27.7 percent, driven by robust growth of the prestige brands and a strong performance in China.
Prestige brands increased 6.5 percent, driven by strength in the U.S. and China, while Mass net revenues decreased 14.3 percent.
THE WHY Sue Y. Nabi, Coty’s CEO, said, “From a results standpoint, in Q3 we saw a significant improvement in our sales trends even as we continued our efforts to strengthen the health of our business and brands by cutting sales in low quality channels. Importantly, the prestige sales returned to growth as the impact of the pandemic abated in many markets.
“We have seen strong momentum in several of our key markets, with China sales growing double-to-triple digits versus FY20 and FY19, and U.S. prestige sales up high single digits in the quarter and nearly flat in the fiscal year-to-date. While Europe sales remain under pressure, we are confident that the imminent lifting of COVID restrictions will drive improvement in this key region.”
The company echoed its for full-year revenue guidance of $4.5 billion to $4.6 billion and cost reductions of about $300 million in fiscal year 2021.