Coty Inc, a prominent beauty company, has unveiled its projections for revenue growth in the forthcoming years, indicating a favorable turnaround for the brand. Following a period of decline, Coty is expected to benefit from the recovery of the beauty markets in the United States and China, as well as a resurgence in sales at duty-free stores located in airports.

In response to changing consumer preferences during the pandemic, Coty has strategically shifted its attention towards high-end fragrances, skincare products, and other categories that witnessed increased demand last year. Demand for makeup products has declined as people ventured out less during the outbreak. By leveraging the rising popularity of online shopping and increasing investments in higher-end brands, Coty aims to achieve core earnings of $1 billion in 2022.

To reinvigorate its iconic brands such as CoverGirl, Rimmel, and Max Factor, Coty has implemented a variety of strategies. These include launching new products, collaborating with celebrities like Priyanka Chopra and America Ferrera, and augmenting advertising expenditure. By employing these initiatives, Coty hopes to breathe new life into its brands and attract a wider consumer base.

Sue Nabi, Coty’s Chief Executive Officer, exudes confidence in the growth potential of the beauty industry, stating, “The beauty market has consistently shown growth at a rate of 3% to 5%, and we anticipate outperforming this.” Riding on this optimistic viewpoint, Coty has projected a net revenue growth of 6% to 8% for the next three fiscal years up until 2025, with plans for continued growth beyond that point.

Analysts have commended this positive forecast, with Jefferies analyst Stephanie Wissink highlighting that Coty’s targets rival those of its peers and partners. The company’s impressive performance is further substantiated by its recent prediction of low-to-mid teens percentage growth in like-for-like sales for the fiscal year 2022.

In order to streamline its operations and simplify its capital structure, Coty has announced its intention to divest its remaining 26% stake in the professional beauty business, Wella, by fiscal 2025. This move builds upon previous divestments made since December of the previous year.

Despite the upbeat news, Coty’s shares experienced a minor decline of 1.8% upon the announcement of its fiscal 2022 earnings forecast. However, the future appears promising for Coty as it focuses on capitalizing on market trends, bolstering its online presence, and nurturing its higher-end brands to drive revenue growth in the years ahead.

Useful links:
1. Coty Official Website
2. FragranceX – Online Fragrance Retailer