Coty's Q1 results meet expectations

Coty, the owner of Rimmel and Max Factor, has reported a 1% increase in sales to £1.2 billion ($1.39 billion) for the first quarter ending 30 September 2022.

The group's prestige division saw revenues decline 1% on a reported basis to £754 million ($863.4 million). This was credited to Coty's exit from Russia and industry-wide fragrance component shortages.

Consumer beauty division revenues increased 5% on a reported basis to £459 million ($526.6 million), supported by sustained market share momentum and strong activity.

Sales in EMEA dropped 3% as reported to £532 million ($609.3 million) but grew 11% like-for-like, driven by travel retail momentum and double digit growth across most markets.

In Q1, Coty's reported gross margin expanded by 70 bps to 63.9%, driven by favourable pricing and trade spend improvement. In addition, reported operating income totalled £150 million ($171.9 million) and adjusted EBITDA was up 11% to £268 million ($307.9 million).

Looking ahead, Coty expects to see "strong demand growth" across nearly all markets, particularly in prestige fragrances. The company said it continues to expect FY23 like-for-like revenues for the core business, adjusting for the impact of the Russia exit, to grow 6-8% .

Sue Y. Nabi, Coty's CEO, said: "Our strong Q1 results, in the midst of a complex external environment including ongoing component shortages, confirm the strength and resilience of Coty's brands, teams, strategy and operating model. This represents the ninth consecutive quarter of Coty reporting results in-line to ahead of expectations."

The news follows Coty's decision to introduce a new gender-neutral parental leave policy, which sees all employees have access to the same number of fully paid weeks of parental leave when starting or extending a family.