American-French beauty house Coty reported Q2 2024 net revenue of USD 1,727.6 million, representing a reported sales growth of +13% (also +11%). I am. The company said its earnings growth, operating profit and EBITDA profit expansion results were in line with or exceeded expectations.
This was driven by 15% higher like-for-like growth in Prestige and 5% higher growth in Consumer Beauty. Year-to-date, Coty reported net revenue of USD 3,369 million, an increase of +16% year over year.
This performance was driven by the strong performance of the travel retail business, with revenues increasing +20% year-on-year in the first half of FY24. This momentum spread evenly across categories and regions, with double-digit sales growth in travel retail in Europe, the Americas, and Asia Pacific, where Coty has gained significant market share.
Coty CEO Sue Y. Nabi commented: “The strength of our second quarter and first half results reinforces several of our beliefs, including the attractiveness of the beauty market, continued momentum in the fragrance index, the power of our brands, Coty’s transformation and the industry. – cutting-edge capabilities, new capabilities to create blockbuster fragrance launches, and disciplined financial execution.
“First, the momentum in the global beauty market in the midst of geopolitical and macroeconomic turmoil indicates that consumers continue to gravitate towards and prioritize beauty as a fundamental pillar of health. Backed by: Around the world, consumers continue to purchase fragrances, cosmetics, skin and body care as affordable luxuries and as a means of self-expression.
“This is especially true for middle- to high-income consumers, who as a result continue to outperform luxury beauty products. It emphasizes that it plays an important role in consumer behavior.”
The momentum of prestige beauty is unstoppable
The Prestige category recorded net revenues of USD 1,122 million, representing 65% of Coty sales, with reported growth of +17% (+15% like-for-like) and +20% (like-for-like) in the second quarter. growth of +18%). In the first half. Barbary Goddess, one of his biggest success stories for Coty last year, was a key contributor to this performance.
Coty highlighted that Prestige Beauty’s momentum in the travel retail channel remained strong, which led to solid net revenue growth in all regions, particularly in the Americas and Asia Pacific. In the second quarter, luxury fragrances continued to grow, led by the US, Germany, Canada, Italy and Spain, posting +15% growth. Coty’s continued premiumization, existing pillars and new product launches were highlighted as key drivers.
The company highlighted Chloé Atelier des Fleurs as one of the best performers in fragrances, Burberry, Kylie Cosmetics and Gucci in makeup, and Lancaster & Philosophy in skincare. .
Coty’s Consumer Beauty division’s revenue increased by +7% (+5% year-over-year) to $605.5 million in net revenue, representing 35% of Coty’s sales. This is driven by color cosmetics, mass fragrances, skin care, and body care. This was supported by Coty’s continued investment in social media and increased earned media value, resulting in e-commerce sales growth of over +20%.
Nabi added: “Our great brands and industry-leading capabilities enable Coty to bring extraordinary innovation to the market and further enhance consumers’ desire for beauty.” We are Burberry Goddess. We expected it to be a huge hit, but the launch results have exceeded all our expectations and set new records, driven by winning juice and disruptive market activation across all touchpoints. I am. Burberry Goddess is Coty’s biggest launch ever, becoming the number one fragrance launch in many markets and resonating with consumers everywhere. ”
“Importantly, with strong momentum across our other key fragrance launches, including Boss Bottled Elixir, Gucci Flora Gorgeous Magnolia and additions to the Chloé Atelier des Fleurs collection, each of our top seven fragrance brands increased in the first half of the year. That’s double-digit percentage growth.”
“Our cosmetic innovations, such as CoverGirl Yummy Gloss and Rimmel Thrill Seeker mascara, have also delivered outstanding results, supporting solid revenue growth in our consumer beauty business in alignment with the underlying mass beauty market. , our disruptive innovation, CoverGirl Simply Ageless Essence Foundation, is fueled by an extensive, multi-layered influencer campaign and has already seen great momentum, being voted #1 makeup in its first month of release. We’re off to a strong start to the third quarter. We’re launching on Amazon.”
Growth by region
Geographically, EMEA was the standout, with net revenue of US$825.7 million, or 48% of Coty sales. This represents an increase of +16 as reported (same vs. equivalent +10%).
Net revenue in the Americas reached USD 687.9 million, representing 40% of Coty’s sales, an increase of +10% (+11%). The region’s performance was underpinned by strong growth in nearly all markets, with particularly strong double-digit growth in Latin America, U.S. luxury fragrances, and regional travel retail.
This was followed by Asia Pacific, where net revenue reached USD 214 million, representing 12% of Coty sales, and reported an increase of +15% (+16% year-on-year). Prestige’s growth in the region was driven by his double-digit growth rates in several markets including South Korea, Hong Kong, Taiwan, Australia, New Zealand and regional travel retail.
In China, Coty’s Prestige revenue grew by double digits in mainland China and more than tripled in travel retail hotspot Hainan Island, but revenue from its consumer beauty division declined.
Nabi further added: “Together, we are implementing a balanced growth agenda with equal growth in both prestige and consumer beauty across each region, fragrance, cosmetics, skin care and cosmetics categories. ” body care, and volume, price, and the whole mix. As a result, we are once again outperforming the beauty market.
“Importantly, this growth has been accompanied by strong and disciplined financial execution, which has generated strong earnings growth, operating income and EBITDA margin expansion, and progress in deleveraging. Our All In To Win The Savings program has been a key driver of our financial and operational improvements over the past several years, delivering over $660 million in savings to date and helping us accelerate reinvestment into our growth engine. .and the realization of our benefits.
“As the transformation is nearing completion and we enter the next phase of our sustainable growth agenda, Chief Transformation Officer Gordon von Bretten will join Coty’s controlling shareholder JAB as a partner and join Coty’s Board of Directors. We are very grateful for Mr. Gordon’s leadership in driving this highly successful transformation over the past four years. ”
Coty’s leadership team was further strengthened with this week’s announcement that Gene Holtzman has been promoted to Chief Brand Officer Prestige. Holtzman has been with Coty for seven years and has helped fuel the momentum of Hugo, His Boss and other ultra-luxury fragrance collections.
Coty’s outlook for the second half of the year remains strong, with double-digit growth rates of the past two years becoming the norm over the medium term. Despite headwinds from retailer restocking from last year, we expect sales to increase +6-8% year over year in the second half of FY24.
Nabi added: “As we continue to drive our six-pillar strategy, we are further strengthening our portfolio. We are excited to further strengthen our luxury fragrance portfolio through a new license agreement with the brand Marni. And last week, we announced the launch of our leading Consumer Beauty license as we continue to expand our leading lifestyle fragrance brands in Europe. announced long-term extensions for two of its brands, Bruno Banani and Mexx.
“In short, as we celebrate Coty’s 120th anniversary as a beauty pioneer, we are proud of the progress we have made and encouraged by the many opportunities ahead.” ✈
