Sales for Coty Increase 16% in Q4

Sales for Coty Inc. increased 16% for the fourth quarter of fiscal year 2023, ended June 30, 2023. 

 

The company delivered its 12th consecutive quarter of results in-line to ahead of expectations, while consistently executing across its strategic growth pillars.

 

Coty's strong Q4 performance, with double digit growth in both sales and profits, came in ahead of expectations and recently raised guidance. Q4 reported sales increased 16% or 17% on a LFL basis, ahead of its recently raised guidance of 12-15% LFL growth in Q4. This concluded a what the company reported a “strong year,” with FY23 reported sales growth of 5%, which includes approximately 2% of negative impact from the Russia business exit, and core LFL sales growth of 12%. This strong FY23 core LFL growth exceeded its recent target of 9-10% core LFL sales growth.

 

Coty's sales were driven by consistent momentum in both divisions, supported by strong global beauty demand across categories, geographies and channels. Importantly, core LFL growth for both Q4 and FY23 included low single digit volume growth and approximately 10% benefit from price and mix.

Prestige segment led during the quarter, with both reported and LFL sales growth of 21% versus the prior year. For FY23, the prestige segment grew 5% as reported while core LFL revenues grew 13%. The momentum in the fragrance category remained in full effect, with the prestige fragrance market growing over 10% in both Q4 and for the full year. Coty's prestige fragrance revenues outperformed the market, growing over 20% in Q4 and a low teens percentage in FY23 on a core LFL basis. Importantly, this strong performance in Coty's fragrance portfolio remained broad-based, with all its top brands growing double digits LFL in FY23. Coty once again delivered industry-leading innovations during the year, including Burberry Hero EDP and Burberry Her Elixir, Hugo Boss Parfum and Gucci Flora Gorgeous Jasmine, while the Chloe Atelier des Fleurs line continued to excel in the ultra- premium fragrance segment in Asia. The Company continued to strengthen the foundation of its fragrance portfolio during FY23, through the extension of the Hugo Boss, Davidoff and Jil Sander licenses, together with the expansion and extension of the Marc Jacobs license, which now includes plans to launch a prestige cosmetics line.

 

In spring 2023 Coty kicked off its prestige skincare acceleration strategy, with new launches and strong in-market activations behind Lancaster and philosophy. These initiatives saw very positive early results, with revenues for both Lancaster and philosophy up double-digit percentages in Q4. Revenues for Coty's prestige cosmetics were pressured in the early part of the year by the Chinese lockdowns, but rebounded strongly in Q4 with over 25% LFL growth.

 

Consumer beauty revenue rose 9% as reported in Q4, with core LFL growth of 10%, driven by strong growth across all categories. For FY23, Consumer Beauty grew 5% as reported, while core LFL revenues grew 11%, including high single digit to double digit LFL growth across the majority of Coty's leading brands. In FY23, Coty continued to lean into the market-leading trends of clean beauty with the launches of CoverGirl's Clean Fresh Yummy Gloss, adidas' Active Skin & Mind range, and Bourjois' Healthy Mix foundation, as well as into skinified beauty with the launches of Max Factor's Miracle Pure foundation and the extension of the CoverGirl Simply Ageless line.

 

Geographically, all regions contributed to the Company's growth in Q4 and FY23. For the year, Americas grew 9% as reported and 10% LFL, EMEA grew 1% and 13% on a core LFL basis, and Asia Pacific grew 7% as reported and 13% LFL.