Coty reported sales increases of 22 percent to $1.37 billion for the first quarter of 2022 ended September 30, 2021. Net income was $228.9 million, up from $227.3 million a year ago.
Both strong brick-and-mortar growth and 23 percent growth in e-commerce boosted sales. Coty’s Prestige Division delivered 35 percent growth in the quarter, to $870.7 million with adjusted earnings before interest, taxes, depreciation, and amortization of $215 million. Prestige fragrance sales increased across nearly all brands, with strong performance from Gucci, Burberry, Hugo Boss, Marc Jacobs, Calvin Klein, and Chloe. The momentum was fueled by a very strong fragrance launch calendar with standout results from Gucci Flora Gorgeous Gardenia and Burberry Hero. Also, prestige cosmetics sales more than doubled year on year, led by Gucci makeup and the relaunch of Kylie Cosmetics. Regionally, the U.S. and China continued to deliver robust performance; Travel Retail more than doubled led by Asia and Europe; and trends in many Western European markets continued to improve.
During the quarter, sales within the Consumer Beauty division grew 4 percent to $501 million, with EBITDA of $63.5 million as the global mass beauty category returned to growth. CoverGirl generated double-digit percent sell-in and sell-out growth, growing market share in four of the last seven months. The re-positioning of both Rimmel and Max Factor have also been showing solid progress across key European markets.
Sue Y. Nabi, Coty’s CEO, said, “Q1 marks the fifth consecutive quarter of Coty delivering results inline to ahead of expectations. Importantly, our Q1 results exemplify the virtuous cycle that we have been working to create, where our strong topline performance coupled with sustained gross margin expansion and cost initiatives, fuel both profit expansion and targeted re-investments to support future growth.”
Sue attributed the company’s successful execution across each of its strategic pillars as reasons for success. Examples include the successful repositioning of CoverGirl, Rimmel, and Max Factor; the success of Gucci Flora and Burberry Hero; and growth of Gucci and Kylie in cosmetics. The company also grew close to 50 percent in China.
Entering the second quarter, Coty continues to see beauty market momentum, including continued strength in the U.S. and China, a strong rebound in Travel Retail, and steady improvement in Western Europe. Given this market backdrop, coupled with very strong performance of Coty’s recent product launches, Coty has raised its fiscal year 2022 sales outlook to low-to-mid teens percentage growth, up from low teens.