09.20.23
Coty Inc. increased its outlook for the first half and full year FY24.
Since providing its guidance on its FY23 earnings call four weeks ago, Coty says it has has seen strong momentum in beauty demand across its key markets and categories, particularly in prestige fragrances. At the same time, Coty says the recent launch of its Burberry Goddess fragrance is setting new market records and reinforces Coty’s position as a fragrance leader. Not only was Burberry Goddess the winning launch in the US in August, with market sales several times higher than recent competitive blockbuster launches, but two of Coty’s fragrance innovations are among the top five of the fall. Coty now has three fragrance lines in the US top 10.
The combination of these factors is driving acceleration in Coty’s volumes and sales; the company now expects core LFL sales growth in first half FY24 of +10-12%, an increase from its earlier outlook of +8-10%. This strength is supporting Coty’s increased FY24 core LFL sales growth outlook of +8-10%, up from its earlier guidance to be at the top end of its medium-term target range of +6-8%.
“The success of Burberry Goddess across key markets confirms that Coty is the go-to destination to create top quality winning fragrances and execute unique and disruptive campaigns,” said Sue Nabi, chief executive officer of Coty. “Having spent the past three years strengthening Coty’s fundamentals and elevating Coty’s organizational capabilities across our categories, we enter the next phase of growth with best-in-class innovation and marketing power.”
The company says it remains committed to delivering a “best-in-class” medium-term growth algorithm, including a mid-20s % EPS CAGR based on profit expansion, lower interest expense and in the medium-term managing share count towards 800 million; active deleveraging; and targeted capital returns.