Coty Inc, a multinational beauty company, is expecting a return to sales growth for the first time in three years fueled by the recovery in fragrance and cosmetic sales as COVID-19 restrictions are lifted. As schools, colleges, and offices reopen, people are rediscovering the joy of dressing up, wearing makeup, and using fragrances, shifting away from the skincare-focused trend of 2020. This shift in consumer behavior has proven beneficial for Coty and other cosmetic manufacturers, allowing them to bounce back after a challenging period.

To take advantage of this behavioral change, Coty has introduced new fragrances such as Burberry Hero and Calvin Klein Defy, endorsed by actors Adam Driver and Richard Madden respectively. The company has announced a strong launch planned for the first half of the current financial year and aims to introduce touchless fragrance testers worldwide. Coty’s CEO, Sue Nabi, highlighted the robust growth in fragrance consumption, particularly in key markets like China and the United States.

Alongside the rebound in fragrance sales, Coty’s cosmetics brand, CoverGirl, has experienced a significant increase in market share for three consecutive months, marking a five-year high. The company’s targeted efforts towards Generation Z and Hispanic consumers have contributed to this success.

Coty anticipates a low-teens percentage increase in sales for fiscal year 2022 and expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of approximately $900 million on a constant currency basis, surpassing analysts’ estimates.

In the fourth quarter, Coty reported a 90% rise in net revenue, reaching $1.06 billion, exceeding Refinitiv IBES estimates of $1.01 billion. However, the company did post an adjusted loss of nine cents per share due to significant investments in advertising and product launches.

Overall, Coty’s optimistic outlook and recent financial performance indicate a promising recovery in the fragrance and cosmetics industry. The company’s strategic initiatives, including the introduction of new fragrances and targeting specific consumer segments, have played a significant role in its success. As the global economy continues to rebound, Coty is well-positioned to capitalize on the increasing demand for beauty products.

Useful links:
1. Reuters – Coty anticipates a return to sales growth fueled by fragrance and cosmetic sales recovery
2. Coty official website