Coty’s prestige business soared during the first quarter of fiscal year 2025, while its mass beauty offering reported a 3% drop.
Consumer demand for fragrances “across all price points” helped deliver a 5% increase in the beauty giant’s prestige net revenue for the quarter ended 30 September 2024.
This “strong growth in fragrances" included prestige, ultra premium and mass fragrances, with double-digit like-for-like growth in the majority of Coty's leading perfume brands.
This boost included the 2% negative impact from the company’s divestiture of the Lacoste fragrance licence.
Coty’s Prestige Fragrance division, which grew 6% during this time, includes Marc Jacobs Daisy, Hugo Boss’s Boss Bottled and Burberry Goddess.
Coty’s Consumer Beauty perfume portfolio comprises licences for the likes of Adidas and Beckham.
“The fragrance market remains robust and a top performing category in beauty, with more consumers entering the category, using fragrances more often, and exploring with a variety of concentrations and formats,” said Coty CEO Sue Nabi.
“This reinforces our view that the structural drivers for the category will allow it to continue to grow in line to ahead of the underlying beauty market in the coming quarters and years.
“We are reinforcing our leadership in prestige fragrances while simultaneously unlocking more opportunities across the full price spectrum, ranging from mass and masstige fragrances, all the way up to ultra-premium and niche fragrances.”
Coty’s Consumer Beauty Q1 2025 sales, however, declined 3% on a reported basis.
Despite net revenues growing strongly in mass fragrance and mass skin care, these were partly offset by declines in both body care and mass cosmetics sales.
The owner of Kylie Cosmetics and CoverGirl said the weakness in make-up was concentrated in the US mass colour cosmetics market.
Coty’s Consumer Beauty Q1 of fiscal year 2025 sales declined 3%
This was further exacerbated by “significant channel shifts, resulting in Coty's US consumer beauty sell-in tracking well below sell-out,” read a statement from Coty.
Sales were down 2% in the Americas during this period, with growth in Mexico and South America offset by lower US consumer beauty sales.
Coty’s EMEA net revenues grew 8%, while in Asia-Pacific it declined 5%, primarily driven by the ongoing difficulty in the Chinese mainland market and Asia travel retail.
"As we enter FY25, the macroeconomic environment remains as complex as ever and the outsized growth of the last few years is now entering the normalisation phase,” said Nabi.
“Nevertheless, one thing is very clear: consumers continue to prioritise beauty in their spending routines, even as they pull back on many other consumer segments.
“And within the broader beauty backdrop, fragrances remain a top performing category.”
Coty’s overall net revenues for Q1 2025 grew 2% on a reported basis to US$1.67bn.
On a like-for-like basis, the company is up 4.5%.
The beauty giant’s net income was reported as $79.6m, compared to a net loss of $1.7m in the prior year.