© Reuters. FILE PHOTO: Covergirl makeup, owned by Coty Inc, is seen for sale in Manhattan, New York City, U.S., February 7, 2022. REUTERS/Andrew Kelly/File Photo
By Ananya Mariam Rajesh
(Reuters) – Coty (NYSE:) on Tuesday raised its annual core sales forecast on the back of higher pricing and strong demand from customers who snapped up the CoverGirl maker’s new makeup and fragrance launches.
The beauty market’s post-pandemic growth has thrived as customers prioritize spending on “affordable luxuries” at a time when sticky inflation has impacted consumption patterns and pushed many customers to put off big-ticket purchases in the United States and Europe.
Coty also posted sales growth in the Americas and Europe similar to beauty company L’Oreal, that noted an acceleration in growth in these regions after an initial slowdown.
Coty’s efforts to launch key products such as Burberry Goddess in its high-end “prestige” category and CoverGirl’s Yummy Gloss in the consumer beauty category drove a double-digit increase in these segments.
“We are not seeing any depressed category … prestige fragrance in U.S. keeps growing very fast,” CFO Laurent Mercier told Reuters, adding that Gen Z was active and driving growth in the consumer beauty segment.
Coty now expects fiscal 2024 core like-for-like sales growth between 9% and 11%, compared with its previous outlook of an 8% to 10% rise.
The company’s first-quarter net revenue rose 18% to $1.64 billion, beating estimates of $1.58 billion, according to LSEG data.
However, Coty reported a net loss, compared with a profit a year earlier, due to an impact from an equity swap and higher costs.
The company posted a first-quarter net loss attributable to common shareholders of $1.7 million, compared with a profit of $125.3 million a year earlier.
Coty also reaffirmed its full-year adjusted per-share profit forecast between 44 cents and 47 cents.
