Global fragrance group Coty lifted its guidance for the fourth quarter and full fiscal-year 2023, on the back of a strong prestige beauty market and recovering China.
The New York-headquartered Coty said it expects 12 percent to 15 percent like-for-like sales growth for the three months ended June 30, and 10 percent to 11 percent like-for-like sales gains for the full fiscal year.
The company also increased its profit outlook for fiscal 2023. It now expects to reach adjusted EBITDA of USD 965 million to USD 970 million, compared to the former guidance of USD 955 million to USD 965 million, despite incurring close to USD 70 million in negative currency-exchange impacts. That will include more than USD 10 million in the fourth quarter, Coty explained at its investor day in Paris.
In Asia, Coty said there is “white space” in China, which clocks an estimated 13 percent of beauty sales worldwide and 4 percent of the group’s sales overall.
The Asian behemoth is a major fragrance market for Coty, with sales of prestige perfumes up 66 percent compared to 202o and growing 1.5-times faster than China’s prestige beauty segment. The company said its Burberry Hero fragrance is ranked in the top 3 male fragrances in China. Looking ahead, Coty said it aims to more than double its sales in China to more than USD 600 million by fiscal-year 2026.
Meanwhile, travel retail, another white space for the group, accounts for 8 percent of Coty’s sales, compared to some 10 percent of the beauty industry’s total. Coty said it has gained market share in the channel in major geographic zones, including 44 basis points in the Asia Pacific region in calendar year 2022 versus 2021.
It added that its Chloé fragrance is ranked in the top 5 travel fragrances.
Looking ahead, the group said it aims to increase its travel retail sales by about 50 percent to more than USD 600 million by fiscal-year 2026.
The travel beauty retail market is expected to grow at a CAGR of 5.2 percent in the forecast period of 2022 to 2029.