Fragrance boosts Coty’s sales in fiscal 2022

Coty’s sales increased 15% in fiscal 2022 to $5.3 billion. The company reported net income of $55.5 million, compared to a net loss of $166.3 million last year.

Sales of prestige beauty products increased by 20% and sales of mainstream beauty products increased by 7%. E-commerce sales posted double-digit gains.

“Today marks the end of another successful year at Coty as we continue to make significant strategic, operational and financial progress,” said CEO Sue Y. Nabi. “We also demonstrated the sustainability of Coty’s turnaround in the business by delivering eight consecutive quarters of results in line with expectations. Coty’s presence in both high end mass beauty and prestige beauty is a crucial asset in the current macroeconomic environment.

Nabi said Coty continues to make progress in each of its strategic pillars. Beginning with consumer beauty, the company continued to gain market share globally during the fourth quarter, marking eight consecutive months of market share expansion. This momentum was supported by the repositioning of key brands, including CoverGirl, Rimmel and Max Factor. The repositioning of Adidas is underway.

Nabi noted that the prestige fragrance business continued to generate exceptional growth, up 18% in the fourth quarter.

In skincare, Lancaster was the No. 2 exclusive brand at Sephora China and No. 3 among niche skincare brands at major retailers in Hainan. In June, Coty launched SKKN by Kim and revenue is ahead of plan.

Digital is Coty’s fourth strategic pillar. E-commerce sales grew at the pace of the mid-teens, supported by live streaming and social commerce efforts, TikTok activations, virtual try-on capabilities and an expanded e-commerce presence.

The fifth strategic pillar, expanding its presence in China, was impacted by the resurgence of covid and associated restrictions for much of the quarter. Still, Coty’s prestige sales grew by double digits in FY22, far ahead of the market which shrank slightly, according to the company.

Finally, Coty made progress in its sixth strategic pillar, sustainability, with multiple innovations including clean formulations, more sustainable and animal-friendly packaging. Nabi said Coty has taken recycling to the next level through a partnership with LanzaTech by starting to manufacture prestige fragrances using carbon capture-based ethanol, which is the No. 1 ingredient in fragrances.

“With continued momentum in the fragrance category, both in Europe and in global travel retail, and a strong innovation pipeline, we expect FY23 to be a year of continued expansion, in line with our growth objectives. medium term. At the same time, we remain vigilant in monitoring the ever-changing macroeconomic environment, with resilience plans developed to support the business should conditions worsen,” Nabi said.

“Our balanced portfolio, spanning key categories, channels, price points and geographies; our portfolio of key iconic brands that continue to consolidate their positions and gain market share; and our significant white space opportunities in healthcare Skincare, China and Travel Retail, all enhance Coty’s attractiveness value proposition in a historically resilient beauty market,” she concluded. “Our virtuous cycle will only further strengthen the business , enabling continued above-market sales growth and gross margin expansion, which will fuel brand reinvestment, improved earnings and further deleveraging.We remain committed to strengthening Coty’s position as a true engine of beauty.”

Donovan B. Sanford