Coty Inc, a leading cosmetics maker, has successfully bounced back from the challenges it faced throughout 2020, experiencing a return to growth for its prestigious brands in the third quarter. The company’s Prestige unit, which includes popular brands like Burberry perfumes and Gucci foundations, saw a 6.5% increase in sales, reaching $600.6 million. This is an extremely positive development for the unit, as it marks the first rise in over a year.

In the past year, Coty faced a significant decline in sales due to consumers being confined to their homes, resulting in reduced demand for makeup products. However, with the resurgence of the luxury beauty market, particularly in China and the United States, as individuals prioritize self-care and pampering, Coty has been able to tap into this pent-up demand and offset previous sales declines.

While sales have rebounded in certain regions, European countries such as the UK and France have imposed restrictions that have hampered the demand for Coty’s products, leading to a 7.8% decline in sales in the region during the third quarter. However, the Asia Pacific region, including China, experienced significant growth with a nearly 28% increase in sales.

Coty’s CEO, Sue Nabi, remains optimistic about the company’s future outlook, expressing faith in the improvement of the UK market as lockdowns are lifted, which is expected to bolster sales in the fourth quarter. Coty also aims to replicate its success in China in the United States as the country gradually reopens with the help of widespread vaccine distribution. Despite some pressure on the mass business segment in the US, Coty’s Prestige unit continues to thrive.

Despite Coty’s overall positive performance, the company’s shares experienced a slight decline of around 5% in premarket trade, settling at $9.84. However, considering that the company’s shares have already gained nearly 50% this year, this setback is minimal.

Overall, Coty’s net revenue has fallen by about 3% to $1.03 billion, which aligns with market expectations. However, the company has managed to break even on profit, marking a significant improvement compared to the previous year’s loss of $271.6 million, with a net loss attributable to common stockholders of $18.5 million for the quarter ending March 31.

Looking ahead, Coty Inc is optimistic about its future prospects as the beauty industry rebounds from the challenges posed by the pandemic. With anticipated easing of restrictions and a growing demand for luxury beauty products, Coty is well-positioned to regain its position in the market and drive further growth in the upcoming quarters.

Useful links:
Coty Inc official website
Reuters article on Coty’s sales rise