Coty Inc. has released its financial report for the first quarter of fiscal year 2024, showcasing strong financial momentum and growth surpassing the beauty market. Coty achieved sales of $1.64 billion with impressive Q1 sales growth of 18%, outperforming the recently raised guidance of +10-12% for the first half of FY24.
Despite expected declines in gross margins due to inflation and changes in the fragrance giftsets mix, Coty reported a 15% YoY growth in operating income to $197.5 million, a 21% YoY growth in adjusted operating income to $302.2 million, and a 17% growth in adjusted EBITDA to $360.3 million. The company’s operational results for the 13th consecutive quarter have met or exceeded expectations, demonstrating consistent execution across its strategic growth pillars.
Coty stated that the prestige segment experienced substantial revenue growth, with a reported 23% increase and a 22% increase on a like-for-like (LFL) basis. Prestige fragrance sales showed remarkable momentum, growing approximately 25% LFL. This growth was driven by the success of core fragrance lines, outstanding results for recent innovations, and improved service levels. Notably, the newly launched Burberry Goddess Eau de Parfum became the top female fragrance launch in key markets, boosting sales for other Burberry fragrance icons like Hero and Her. Three Coty franchises, including Burberry Goddess, Gucci Flora, and Burberry Her, achieved Top 10 rankings for female fragrances in the U.S. for the first time in the company’s history.
Coty’s skincare strategy also advanced, with key brands philosophy and Lancaster experiencing double-digit revenue growth on an LFL basis in both Q1 and the last six months.
In the Consumer Beauty segment, Q1 revenues grew by 10% both as reported and LFL, in line with the global mass beauty market’s resilience. The company witnessed strength in color cosmetics, mass fragrances, and mass skin and bodycare sales. Notably, Coty excelled in e-commerce, achieving over 25% LFL sales growth and gaining market share in this channel. As part of its strategy to accelerate influencer and social media efforts, Coty’s cosmetics brands Rimmel and Max Factor achieved significant milestones in the U.K. market, ranking among the Top 10 brands in terms of Earned Media Value and Visibility, Impact, and Trust.
Geographically, all regions experienced double-digit revenue growth. EMEA sales expanded by 20% as reported and 18% LFL, driven by growth across most markets and Travel Retail. Americas sales rose by 17% as reported and LFL, with strong momentum in all markets and Travel Retail. Asia Pacific sales grew by 16% as reported and 19% LFL, with notable strength in broader Asia and Travel Retail. In China, Coty’s Prestige business achieved double-digit sell-out growth on the mainland and triple-digit growth in Hainan, outperforming the market.
Sue Nabi, Coty’s CEO, expressed pride in the company’s Q1 results, highlighting the sales growth surpassing competitors and the beauty market. Coty remains focused on balanced growth, with strong LFL growth in both divisions and all regions. The company aims to capitalize on the opportunities within its portfolio, including female fragrances, ultra-premium fragrances, skincare, China, and Travel Retail. Coty raised its FY24 guidance for the second time this fiscal year based on the strong Q1 delivery.
Nabi also mentioned the exceptional performance of recent fragrance launches, particularly Burberry Goddess, which became the top female fragrance launch in key markets. Coty’s ability to develop winning scents, activate distinctive marketing campaigns, and launch disruptive in-store and online activations reaffirms its position as a leading fragrance expert. The company continues to deliver robust profit growth, generate cash, and reduce debt while investing in future growth. Coty successfully listed its shares and issued equity on the Euronext Paris Exchange, emphasizing its accelerating growth trajectory and inviting U.S. and European investors to join its success.