French-American beauty house Coty has increased its outlook for the first half and full fiscal year 24. The company has witnessed strong momentum in demand across its key markets and categories – particularly in prestige fragrances.
Its recent Burberry Goddess fragrance launch, with its disruptive in-store activations and high-profile market positioning, is setting new sales records, the company said. The fragrance was exclusively available in global travel retail from 1 July prior to its domestic roll-out in August.
As reported, four weeks ago on its FY23 earnings call Coty had predicted its core like-for-like (LFL) sales would grow by +8-10% in the first half of FY24. Now, the range stands at +10-12%.
Similarly, the company’s like-for-like sales growth for the full year was placed at a medium-term target range of +6-8%, which Coty has now increased to +8-10%.
Coty Chief Executive Officer Sue Y. Nabi said: “The success of Burberry Goddess across key markets confirms that Coty is the go-to destination to create top-quality winning fragrances and execute unique and disruptive campaigns.
“Having spent the past three years strengthening Coty’s fundamentals and elevating Coty’s organisational capabilities across our categories, we enter the next phase of growth with best-in-class innovation and marketing power.”
Coty continues to target modest gross margin expansion in FY24 and 10-30 basis points of adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin expansion, implying adjusted EBITDA of approximately US$1,075-1,085 million at current foreign exchange rates. This is an increase from the previously forecasted adjusted EBITDA of US$1,065-1,075M. ✈
On the record with Sue Y. Nabi (speaking on 22 August’s earnings call)On growth in the fragrance sector: As we enter fiscal’24, we see no signs of slowing in fragrance demand. And while we are already a leader in prestige fragrances, we still have ample white space opportunities in this category, even within our stronghold geographies. On the Burberry Goddess launch: All the company launches are important for me, but one is very dear to my heart – Burberry Goddess. Burberry Goddess launch is the best of Coty know-how in terms of creating winning juices. It takes time to put in place these kinds of methodologies, to craft a launch that is a five-star launch at this level and to execute it. We started to do this in travel retail in July and now we’re expanding globally. And what we are seeing is in a way giving a direction of what could be the upcoming innovations from Coty in this area and therefore for our partners when it comes to fashion houses. On future opportunities: The immediate white space opportunities for this company are female fragrances, ultra-premium fragrances, prestige cosmetics, travel retail and Brazil. And then there are the mid-term opportunities, which are skincare and China.
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