Coty's premium fragrances, cosmetics launches drive quarterly revenue beat
Reuters
Published Feb 07, 2024 04:31PM ET
Updated Feb 07, 2024 05:02PM ET
By Ananya Mariam Rajesh
(Reuters) -Coty beat Wall Street estimates for second-quarter revenue on Wednesday, powered by higher pricing and strong demand for its high-end Burberry and Gucci fragrances and fresh launches of cosmetics in the U.S. during the holiday season.
The company's newer products such as Burberry Goddess and CoverGirl Clean Fresh Yummy Gloss helped pull in customers in the U.S. compared to bigger rival Estee Lauder (NYSE:EL), which flagged feeble demand in the country and is doubling down on new launches and reinventing existing products.
In the Americas region, Coty (NYSE:COTY)'s net revenue rose 10% to $687.9 million, accounting for 40% of its total sales.
Coty's U.S.-listed shares were up about 1% in extended trading.
Coty invested in social media promotions and collaborated with influencers, which helped its prestige and consumer beauty divisions gain market share in the e-commerce segment.
The CoverGirl parent's little exposure to the China market also shielded it from the economic uncertainties in the country that hit demand for other luxury companies such as Estee.
"China remains a fantastic opportunity ... and there is premiumization and this is where Coty is very well positioned. So, we are growing much faster than the market in the second quarter ... and are gaining shares in prestige fragrances," CFO Laurent Mercier told Reuters.
Coty's prestige revenue in Mainland China grew in double-digit percentage. Its total net revenue for the second quarter rose 13% to $1.73 billion, beating LSEG estimates of $1.68 billion.
But net income fell 24% to $177.6 million in the quarter, mainly due to higher costs of production. Adjusted gross margin decreased by 40 basis points to 65.1%, largely because of obsolete inventory.
Coty posted adjusted earnings per share of 25 cents, including a non-operating EPS benefit of 6 cents from mark-to-market on the equity swap due to stock price increase. Analysts on average expected 20 cents.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.