Coty’s Q1 sales growth of 18%, as reported and LFL, came in well ahead of expectations and recently raised guidance of +10-12% for the first half of FY24. The Company once again delivered a balanced growth equation, with low-single-digit percentage volume growth, estimated high-single-digit percentage pricing contribution, and high-single-digit percentage benefit from mix and other.
This marks the 13th consecutive quarter of operational results inline to ahead of expectations. Revisit Coty’s results from Q4 2023.
Commenting on the operating results, Sue Nabi, Coty’s CEO, said:
We are proud of our great Q1 results, with sales growth once again amongst the best in our peer set and ahead of the beauty market. Coty continues to deliver on our balanced growth agenda, with strong LFL growth across both divisions and all regions, with growth contribution from volumes and premiumized mix, complemented by targeted pricing, and from our key categories including fragrances, cosmetics, and skincare.”
Prestige revenues grew at a very strong rate in Q1, accelerating to 23% growth as reported and 22% growth LFL. The momentum in prestige fragrance demand evidenced in recent years continued in Q1, with the prestige fragrance category continuing to grow at over 10%. Against this backdrop, Coty’s prestige fragrance sales grew approximately 25% LFL, driven by momentum in its core fragrance lines, outstanding results for Coty’s recent innovations and improved service levels.
In particular, according to Coty, the recently launched Burberry Goddess Eau de Parfum has been the #1 female fragrance launch in key markets, while simultaneously elevating the sales of other Burberry fragrance icons including Hero and Her. The strengthening of Coty’s fragrance icons was evidenced by three franchises – Burberry Goddess, Gucci Flora, and Burberry Her – reaching the Top 10 female fragrances in the U.S. for the first time in the company’s history.
Coty continued to advance its skincare strategy, with key brands philosophy and Lancaster both growing revenues at a double-digit percentage pace LFL in both Q1 and the last 6 months.
Consumer Beauty Revenues
Coty’s Consumer Beauty Q1 revenues grew by 10% as reported and LFL, growing inline with the global mass beauty market, where demand remains resilient. During the quarter, the Company saw strength in its color cosmetics, mass fragrances, and mass skin & bodycare sales.
The Consumer Beauty business saw particular momentum in e-commerce, with over 25% LFL sales growth, delivering share gains in the channel. As part of the Company’s strategy to accelerate its influencer and social media strategy, Coty reached key milestones in its core U.K. market, with two of its cosmetics brands – Rimmel and Max Factor – ranking within the Top 10 brands in terms of Earned Media Value and Visibility, Impact and Trust.
Geographically, all regions generated double-digit percentage revenue growth. EMEA sales expanded 20% as reported and 18% LFL in Q1, driven by double-digit percentage growth across most markets and Travel Retail.
Americas sales rose 17% as reported and LFL, driven by strong momentum in all markets and Travel Retail. Asia Pacific sales grew 16% as reported and 19% LFL in Q1, with strength in broader Asia and Travel Retail. In China, sell-out growth in Coty’s Prestige business was well ahead of the market, growing by double digits percentage in mainland China and triple digits percentage in Hainan.
Coty also continued to progress on its ESG agenda, with 3 of its global manufacturing plants now carbon neutral. The Company will provide additional details on its progress and ambitions in its upcoming 2023 Sustainability report.
Several months into FY24, the beauty market remains a strong and outperforming category, with ongoing premiumization trends. Against this favorable backdrop and given Coty’s strong Q1 delivery, the Company now expects FY24 LFL revenue growth of +9-11%, ahead of its recently raised guidance of +8-10%.
For the first half FY24, Coty now expects LFL revenue growth of +11-13%, an increase from its previous outlook of +10-12%.