Kylie Cosmetics owner Coty outperforms market with double-digit growth

Coty confirms "beauty maintains its privileged position" after revealing its financial results for the fiscal year 2024, which ended 30 June 2024, were "ahead of or in-line with expectations".

During the fourth quarter, Coty's net revenues grew by 1% on a reported basis. The Q4 reported sales growth was supported by growth in both prestige and mass fragrances, prestige cosmetics and mass skin & body care.

In FY24, total net revenues grew by 10% on a reported basis, ahead of the global beauty market which grew approximately by 9%.

Coty continued to deliver balanced revenue growth across the board of Prestige and Consumer Beauty. The Prestige category, which includes brands such as Burberry, Kylie Cosmetics, and Chloé, saw revenues rise by 13%. This was fueled by growth in fragrances, cosmetics and skincare.

The Consumer Beauty category, which includes brands such as Rimmel and Max Factor, saw revenues increase by 6%. This was fueled by growth in colour cosmetics, mass fragrances and mass skin & body care. All regions generated high-single-digit to double-digit percentage reported net revenue growth.

The company generated a reported operating income of £419.6 million ($546.7 million), up by 1% year-on-year and an adjusted net income of £248 million ($323.1 million), down from £351.4 million ($457.9 million) the year prior. However, adjusted EBITDA grew by 12% to £837.4 million ($1.09 billion), exceeding the company's guidance.

Sue Nabi, Coty's CEO, said: "Our FY24 results set a new milestone in Coty's sustained track record of top-notch execution and market outperformance. In a dynamic macroeconomic backdrop, beauty maintains its privileged position, being neither a consumer goods industry nor a luxury goods industry. Instead, beauty is at the sweet-spot of desire, well-being, self-confidence, affordability, ritual, indulgence, and many new things that we and our consumers will invent. This is what fuels the strong global beauty growth that we continue to see to this day and which we expect to continue for the quarters and years to come.

"At Coty, having transformed our organization and strategic path several years ago, we are now performing as a beauty leader and more and more as a beauty trendsetter, which we believe is an opening for a new era for Coty as a beauty powerhouse. Importantly, a key element of this outperformance has been our unwavering strong investment into our marketing, regardless of the macroeconomic volatility, because we believe that this is what will create value for our brands for the long term."

Looking ahead to FY25, the company expects to grow by 6-8%. It is targeting an adjusted EBITDA growth of 9-11% to £910-927 million ($1.186-1.208 billion).

Nabi concluded: "We are confident in delivering another year of growth in line with our medium-term targets, steady margin expansion, cash flow improvement and deleveraging progress. As we strengthen our position as a global beauty powerhouse, acting with the agility of smaller brands but also creating the beauty trends of today and tomorrow, Coty remains one of, if not the most compelling investment opportunities in our industry."