Mass market beauty brands poised to deliver for Coty in 2022
Mass market beauty brands Rimmel and Maxfactor look set to play a key role in boosting Coty’s financial performance in 2022 – building on the 37.9% rise in like for like mass channel revenues reported in the fourth quarter of 2021.
The boost in mass channel revenues reported in Q4 2021 follows a brand repositioning for Rimmel and Max Factor in the US earlier this summer, which is being rolled out across Europe now.
Growth in Coty’s mass market channel was reported across all regions, with Rimmel holding its #1 position in the UK makeup market and achieving its highest market share in 10 consecutive months.
Commenting on the operating results, Coty Chief Executive Officer Sue Y Nabi, said: “In our consumer beauty brands, we are clearly seeing CoverGirl's transformation take hold with consumers, as the brand gained market share for three consecutive months, for the first time in five years.
“We are excited about the path ahead for Rimmel and Max Factor, as the new brand positioning, communication and visuals are being introduced now across European markets.”
Coty is also anticipating continued fragrance momentum as it enters the first quarter of 2022, with growth set to be fuelled by a “strong launch calendar,” it said.
Prestige fragrance brands including Gucci, Marc Jacobs, Burberry, Calvin Klein and Chloe, all delivered “standout” performances in the last quarter of 2021, with all having posted double-digit growth.
The newly relaunched Kylie cosmetics line was also seeing “great momentum on and off-line in the US and across Europe” Coty added.
The fragrance and cosmetics giant recently reported an 89.6% rise in revenues for the fourth quarter of 2021 or 80.7% like for like - ending the year with revenues of $4.63bn - above the high end of its $4.5-4.6bn guidance range.
While all regions returned to year on year growth in Q4, the US and China markets were standouts.
“We have also made great strides on our objectives of becoming a key player in prestige cosmetics and strengthening our skincare portfolio," Sue Y Nabi added.
"Gucci and Burberry makeup are already amongst the Top 25 makeup brands in China overall only a couple of years post launch and Gucci makeup now ranks in the Top 10 within the US and Europe doors where it is present.
“We intend to capitalize on this momentum in FY22, significantly expanding both our distribution and assortment.
“This operational and strategic progress was achieved without sacrificing our financial delivery, with FY21 gross margins of 60% back to FY19 levels and adjusted EBITDA margin of 16% up over 300 bps vs FY19, setting the baseline for further expansion in the coming years.
“Importantly, with two months into the new FY22 year, I am extremely encouraged by the momentum we are seeing across the business.
"As we continue to make tangible progress in each of our focus areas, I am more confident than ever in the growth and value creation path in front of Coty."