Coty's revenue climbs thanks to prestige fragrance

Beauty giant Coty reported strong revenue in its fiscal fourth quarter, supported by both its mass and prestige divisions, but missed profit estimates as it grapples with elevated input costs.

The company’s net revenue grew 16% year over year in Q4 and 5% for the full year.

In its prestige beauty segment, revenue was up 21% YoY, driven by a 20+% revenue boost for its prestige fragrance category in the quarter, supported by new products from Burberry, Hugo Boss, and Gucci. The company has also been making a prestige skincare push since the spring, CEO Sue Nabi noted, with a goal to double its skincare revenue over the next few years. This effort includes a “revamp” of its Philosophy brand, whose revenues grew by double digits in Q4.

• The company did not address reports last month that Kim Kardashian is in talks to buy back her skincare brand, SKKN.

On Monday, Coty also announced the return of Marc Jacobs Beauty after the brand’s two-year hiatus, after its partnership with LVMH-owned Kendo ended. Coty secured a 15-year license to produce the brand’s cosmetics, likely to hit shelves in 2025, which Nabi said today will be a “great and differentiated addition” for its prestige cosmetics division.

Consumer beauty, Coty’s mass cosmetics segment which includes CoverGirl and Rimmel, grew 9% in the quarter and 5% for the full year. The company's focus on clean beauty to capture Gen Z dollars helped drive growth, and included launches from CoverGirl and Adidas Active Skin & Mind (the company just renewed its decades-long license with Adidas last week).

But, but, but: While paper and energy prices have dropped, other materials are still high due to labor costs, CFO Laurent Mercier said. Coty, which missed profit estimates despite revenue and sales gains, is executing another round of price bumps in the current quarter as it transitions “to cleaner and more sustainable products” and closes “pricing gaps versus our competition.”