Fragrance Drives Coty’s Sales in Fiscal 2022

Coty's sales rose 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.

Prestige beauty sales rose 20% and consumer beauty sales were up 7%. E-commerce sales posted double-digit gains.

“Today marks the end of another successful year at Coty as we continued to make significant progress strategically, operationally and financially,” said CEO Sue Y. Nabi. “We have also demonstrated the sustainability of Coty's turnaround in the business by delivering eight consecutive quarters of results in-line to ahead of expectations. Coty's presence in both premiumized mass beauty and prestige beauty is a crucial asset in the current macroeconomic environment.”

Nabi said Coty continues to make progress across each of its strategic pillars. Starting with consumer beauty, the business continued to gain market share globally during Q4, marking eight consecutive months of expanding market share. This momentum was supported by the re-positioning of key brands, including CoverGirl, Rimmel and Max Factor. The repositioning of Adidas is getting underway. 

Nabi noted the prestige fragrance business continued to deliver outstanding growth, increasing 18% in Q4.

Within skincare, Lancaster was the No. 2 exclusive brand at Sephora China, and was No. 3 among niche skincare brands in key Hainan retailers. In June, Coty launched SKKN by Kim and revenues are coming in ahead of plan.

Digital is Coty's fourth strategic pillar. E-commerce sales increased at a mid-teens pace, supported by efforts in livestreaming and social commerce, 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 related restrictions during much of the quarter. Still, Coty's prestige sell-out grew double digits in FY22, far ahead of the market which declined modestly, according to the company.

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

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

“Our balanced portfolio, covering key categories, channels, price tiers and geographies; our portfolio of iconic key brands which continue to solidify their positionings and gain share; and our substantial white space opportunities in skincare, China and Travel Retail, all reinforce Coty's attractive value proposition in the historically resilient beauty market,” she concluded. “Our virtuous cycle will only further strengthen the company, allowing for continued above-market sales growth and gross margin expansion, resulting in fuel for brand reinvestment, profit improvement and further deleveraging. We remain committed to growing Coty's position as a true beauty powerhouse.”