Coty released its third-quarter fiscal 2024 results, ending on March 31, 2024, showcasing robust performance that exceeded market expectations. The company experienced an 8% increase in net revenues to $1,385.6 million on a reported basis and a 10% growth on a like-for-like (LFL) basis during Q3. This growth was primarily driven by strong sales across fragrances, color cosmetics, skincare, and body care segments, surpassing the projected growth range of 6-8% for the latter half of the fiscal year 2024.
Prestige net revenues increased 8% to $ 867.2 million on a reported basis and 13% on an LFL basis. On a year-to-date basis, Prestige net revenues grew a strong 17% on both a reported and LFL basis. In 3Q24 and year-to-date, reported net revenue growth in Prestige remained strong in fragrances, cosmetics, and skin care, but Q3 included a 4% negative impact from the divestiture of the Lacoste license and a 1% negative impact from FX.
Consumer Beauty net revenues increased 6% to $518.4 million on a reported and LFL basis. On a year-to-date basis, Consumer Beauty revenues increased 8% on a reported basis and 7% on a LFL basis. In 3Q24 and year-to-date, Consumer Beauty’s reported net revenues grew in color cosmetics, mass fragrances, and mass skin & body care in most countries, offsetting the market weakness in U.S. mass cosmetics.
The prestige fragrance market experienced a significant uptick in growth, reaching a mid-teens percentage increase in Q3. This, combined with Coty’s enhanced market share, drove substantial growth in net revenues across various prestige fragrance brands. Coty’s prestige fragrance revenues grew by approximately 7% as reported and 12% on a like-for-like (LFL) basis in Q3, and approximately 18% both as reported and LFL year-to-date. This growth was fueled by the strength of existing iconic fragrances alongside contributions from new launches.
Notably, Burberry Goddess, Coty’s largest-ever launch, continued to be a top-performing global female fragrance launch. Together with robust growth in other Burberry franchises, it contributed to over a 50% increase in Burberry’s total net revenues in Q3. Capitalizing on this successful launch, Marc Jacobs Daisy Wild and Cosmic Kylie Jenner emerged as the top two fragrance launches in the U.S. calendar year-to-date, reaffirming Coty’s leadership in the fragrance industry.
Coty’s prestige cosmetics segment also experienced strong momentum, with reported net revenue growth exceeding 25% in the quarter. This growth was primarily driven by its three prestigious cosmetics brands: Burberry, Kylie, and Gucci. Coty’s prestige skincare segment witnessed a high-single-digit percentage increase in reported net revenues, with Lancaster leading the charge with robust double-digit growth.
The company’s e-commerce channel experienced nearly 20% growth in Q3, following a similar growth rate in the first half of the fiscal year. Consequently, the year-to-date e-commerce penetration rose by approximately 190 basis points compared to the previous year, reaching around 20%. In the Prestige segment, double-digit percentage growth in the e-commerce channel was propelled by new product launches such as Cosmic Kylie Jenner and Marc Jacobs Daisy Wild, supported by strong social media activations and collaborations with e-retail partners. In Consumer Beauty, e-commerce growth of approximately 30% was driven by nearly all regions, particularly the U.S., Latin America, and Europe. Coty expanded its e-commerce market share in both segments.
The company sustained momentum in high-growth markets and channels. Global Travel Retail trends remained robust across all three regions, contributing to a reported net revenue growth of around 20% in Q3. In China, Coty’s Prestige business achieved reported net revenue growth in the mid-teens percentage range. Coty’s growth engine markets continued their strong performance, with mid-to-high teens reported revenue growth and over 20% like-for-like growth in both Q3 and year-to-date, driven by strong performance in Brazil, other parts of Latin America, Southeast Asia (including India), and Africa.
Coty experienced robust reported net sales growth momentum, with all regions posting high-single-digit percentage increases. Year-to-date, all regions achieved double-digit percentage reported net revenue growth. In the Prestige segment, Coty expanded its market share across all three regions in Q3.
In the Americas, net revenues surged by 8% on a reported basis and by 11% on a like-for-like (LFL) basis in Q3. This growth was primarily fueled by strong double-digit percentage increases in Latin America, Canada, and the Travel Retail channel, partially offset by a 2% negative impact from foreign exchange fluctuations and a 1% setback from the divestiture of the Lacoste license.
EMEA saw a 7% increase in net revenues on a reported basis and a 9% rise on an LFL basis in Q3. The growth in EMEA was sustained by continued expansion across most markets and the Travel Retail channel, along with a 2% foreign exchange benefit, although it faced a 4% headwind from the Lacoste license divestiture.
Asia Pacific recorded a 7% growth in sales on a reported basis and an 11% increase on an LFL basis in Q3. This growth was driven by double-digit percentage increases in Asia excluding China and the Travel Retail channel, as well as triple-digit percentage growth in Hainan, albeit partially offset by a 3% negative impact from foreign exchange fluctuations.
