Coty (COTY) 9 May 222022 Q3 Earnings call transcript

Company Profile

Participants

Sue Nabi	Chief Executive Officer
Laurent Mercier	Chief Financial Officer
Andrea Teixeira	JPMorgan
Steph Wissink	Jefferies
Robert Ottenstein	Evercore
Nik Modi	RBC Capital
Wendy Nicholson	Citi
Steve Powers	Deutsche Bank
Olivia Tong	Raymond James.
Chris Carey	Wells Fargo
Mark Astrachan	Stifel

Call transcript

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Operator

Good morning. My name is Katie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Coty Third Quarter Fiscal 2022 Question-and-Answer Conference Call.

As a reminder, this conference call is being recorded today, May 9, 2022. Please note that earlier this morning, Coty issued a press release and prepared remarks, which can be found on our Investor Relations website. Sue Officer. Executive is Mercier, and call Financial Chief today's Nabi, Officer; Chief Laurent On like remind would may I to contain comments of forward-looking today the statements. you that many filed lists factors could Coty's and earnings from Please differ results that SEC those refer company the forward-looking cause to statements. reports the where with to release materially actual the

measures company's as Coty's Coty's expectations and With addition, where specified the will the In in results now except the noted, line financial the section non-GAAP we that, for financial certain release. discussion adjustments of of open reflect questions.

Operator

Thank you.

will from ahead. today question first Please, JPMorgan. Teixeira go Our come Andrea with

Andrea Teixeira

Prestige feeling Consumer your for see are line, the fourth in feel Hi. how top Good and will guess, quarter do light -- can, bit and you how quarter? terms And QX, a the release the share that you. fiscal, with you exit Thank quarter morning, comfortable if through as your market in little you you remarks you that your prepared the on related press everyone. how for Prestige I that you more the stacking trends what to to, quarter that? also then, do in innovation made the how you in of Beauty, see comfortable fourth Sue, side, of, -- you Particularly on and and implied on elaborate exit wanted I kind is commentary just assumptions the evolving? your

Sue Nabi

you your Sue Thank speaking. Hello, is for Andrea, this question.

we a it's the Consumer investment in behind was momentum It's believe Consumer implied rightly our I was Consumer you specifically behind XX% QX, while a also on division. quarter, say, a growth the more do strong the media two we Beauty. QX QX very on is we you the growth and continue, balanced, much as are our results heavily as again, Prestige, would to fourth for on heavily that mentioned, QX to good Prestige. the So Prestige going And XX% division and divisions Beauty seeing very behind during brand going Prestige are behind have that Beauty know,

you as countries if the business, seeing lockdowns division. specifically for to are if Prestige be Prestige hopefully going hopefully we momentum and for the are kept the can of possible, which one China, stopping So key the imagine, accelerated, the is in

have maybe recovery So that this our the Russia given exclude in The all way -- as know, and this, not see we at guides China. limited I course, of is it. with you that you assumes,

And, there, in And behind better could we specifically Beauty. of Consumer may is this issue line. that we had China this for And, So April was US upside mascara of again, about some outlook. if supply And you've just seen we CoverGirl, months. have potentially be terms couple our is is the finished, best-selling in the behind that a that part, getting which the on finish to trend month second sorry, line in which with just our is better. again, now -- X, and doing I the see hopefully, specifically in the

CoverGirl So to, see back almost I be would us. this we that But supply will normal we'll we do can believe if behind say, June, help around July.

Andrea Teixeira

Are Shanghai particular the Beijing in how going some and an the then In as of of impact I'm they is in well. third exit in assuming other you embedding then that quoted you there on, the had right, all quarter? assuming much fourth What you some had What you're -- are quarter, lockdowns say. no you have the saw the -- in Travel obviously, you March. are Retail impact and expecting? the in what worse, impact quarter, I conference, is and would And getting in China in they're on the that of will of in still your China embedding March, peers recovery

So how your the of performed rest was fiscal the and if third quarter much let know the world us now -- how you much ex-China. in can

Sue Nabi

the again, in seeing and way limited have time say, terms could way built relative. will So is, in very, that mind also the we is we've cautious very in same be quarter the at of fourth things which would COVID China having of I

during we've the this. even Again, seen losses So net revenue that lockdowns third this say, the compensating of biggest in in including had way I in cities because in Mainland these Travel Retail further we've is China, constraints, our news the Mainland. if of terms the Hainan, quarter, the the built the is we China been good with may lockdowns for of

we positive, the that quite China to will positive we in our during ones. slightly on for the sales sales think say, are also is during this up QX, So Hainan is And us I -- the help mitigate, what in again, if thanks made that losses saw we to going impact this QX to may fact, China. that Mainland

the can probably So we the job financial. of compensating

Operator

you. Thank

Steph Our Jefferies. from question Wissink with next comes

Steph Wissink

morning, could. good like margins, everyone. Would we to focus Hi, gross on in if

of emphasizing upside some you from, related, mix value. be unlock If was talk internal going little you any where you'll or were as productive quarter areas Thank to a further that A&CP, forward? you. whether some bit about into could your that in the strategies that then particularly came reinvested And of it

Sue Nabi

year-to-date, basis you on Hello, performance and roughly Steph, year. noticed, margin, better XXX higher. outstanding indeed quarter, so I mean, this so on points And points basis XXX last gross the than

several output are and the hand, the shared work is and one we the of the putting focus this combination all times cost initiative on we on reduction. of, the really really So

the to are chain, accuracy. the really thanks that example it's well with give we times journey. procurement. forecast of So this focus ELO several we continue with reducing better supply And We

are definitely same the number focus, amplifying value part And what This a So cost. of the is with the at I'm is coming we definitely, keep definitely focus the the gross margin. what on we one. reducing time,

strategic is again explain that this I really all the and gross mix times I and accretive. several the initiatives So margin number were one, what shared

So and it's premiumization portfolio staying Prestige China Beauty. Consumer really all It's also within makeup, the really of e-commerce. the

remember doing we to But You in Consumer new shared initiatives gross the Prestige. equivalent several are some Beauty. which we even times cases, in that margin, is

means this are mix that it So that continuing. doing is we

really continue will the it So to gross margin. fuel

this, gross the minimization, inflation, are of getting I revenue management it’s And of also it's course, in pricing we this context cost trade margin, pricing definitely control mitigate to again pushing really are are top and on to Second, of premiumization, course, have of our we the all now this we but pricing. because we and very thanks where terms. power, tight for very, accretive the mean, doing really on

So gross all keep see margin. to with building and when the cost ingredients and you fueling the we keep value, to need

definitely all thanks -- examples. you the definitely ROI is margin can invest focused the [ph]. this this so gross all to and confirmation And that A&CP the in So concrete some is Sue the give on with QX in we can

Sue Nabi

Absolutely. Thank Laurent. you

invest continue going QX. So A&CP, during clearly, quarter the are to to we

very, you've very for it's As QX. been seen, QX and productive

and gross our same cost the revenue with while us at story. allow continue behind same growing, the programs. continuing margin to, time, again, we of better. reinvest brand always the it's flywheel. savings the the the This story same So And company Net deleverage

digits and tendency, much have more single the predictive to is is going In high sometimes have brand behind This representing well. some net of items, of terms the we going countries, this. seen of are doing some Rimmel particularly revenues seen results. of most fantastically we the to accelerate, than acceleration that's We've the

during accelerate. having the thing. BOSS seen We exhibition are help well fantastic strong are makeup going by we Kelsea the everywhere The fantastic Gen-Z is that makeup, same regain is leading for the fragrances, momentum we QX. doing this the it. Gucci fantastically definition, to continue as this Burberry and brand going to Prestige signature we seeing Gorgeous behind we but Hero, momentum are of CoverGirl, behind not momentum money as success; success; is, the can intend to again put brand Scent; And behind last Gucci to us Ballerini to And you invest behind the because face HUGO imagine, something Gardenia, you've our the Flora least and And

Steph Wissink

Very helpful always. Thank as you.

Laurent Mercier

you, Steph. Thank

Operator

question next from Robert Our will Instructions] come with [Operator Ottenstein Evercore.

Robert Ottenstein

drill Great. new into Obviously, April. Thank you a Thank you. little wondering that, and you is makeup could more very know specifically, there's signs supply CoverGirl issues, then with bit and you it into down puts the on cetera, the any further market, into taking confidence lots much. tell there, most takes takes were US maybe the on you of I brand mobility, if I seeing but that path. trends? give And developing was us positive et that's a there's how CoverGirl that that increased but and give

Sue Nabi

your Hi, question. Robert, thank for you so much

are US such in what new we if we as So to side seeing the some the years, It seeing the face the the being if specifically and clearly one. after one category figures. other pandemic, I categories say, are on the on quarters category on and, past, I mainly of again, key people already eye lips may two on started visibility, market in back during side, say, therefore, the is

investing again, year the CoverGirl, I last, would So what therefore, to And last had franchise. say, Clean back news very overall behind the last good would last – And we strongly the are, has seen you've eye last behind makeup. again, the because, I clearly, been brand normality. we call very it's momentum and

around rebirth. are beauty. rebirth And of do also hint is color, we do side we two the two I ago, the its But second but boost of I really behind healthy because drivers of behind Ballerini, the to call are we heritage CoverGirl there, brand beauty. probably Clean saw faces believe we exhibition be just are back these launching And quarter a probably fashion with recently. is new mascara, CoverGirl behind second a told after I America two general. is its give half behind the overall very, think, Clean the was behind Level lips and very This, born We category adding X equity lead that are very you are just beauty one second that looking exhibition continuing makeup course, the brand can that category was continuing, we'll time especially We leg have now Zs I I or and growth Kelsea one a the it recently, CT things beauty. we and story lot have what make also, in level in beauty CoverGirl. the is and which to to we and category on it these the number news age say, of areas launched, and And in have for we have would pushing we is in share Remember, new something lead one reactivated clean trending of which CoverGirl cool easy quickly to one of say, between spring, cool good we very or the up and are are today can we ball and would I that first US, soon. on of Clean quarter. could Clean gain Gen years compromise CoverGirl care. confident activating, ball, side just a CoverGirl color are when thanks you bigger this last that's being And a about clean new we arising have categories, that and as the the muscle bringing

a different is that's today. part of the back years she story, So made clean to faces and invest, of Latifah, gives we that us announcement idea ago, an was new of of a that where on was, that to face CoverGirl of this to she's CoverGirl be continuing tribes while most areas product brand on was face, have the the that's We kind this not face just going cool a the to going is pushing clearly continue the is made the the Taylor years for CoverGirl designate. strongly the you activate targets CoverGirl and Queen to help same iconic one Kiki way new

Operator

Thank you.

will next Modi from RBC Our Capital. come with Nik question

Nik Modi

Yes. Thank everyone. you. Two Good morning, questions.

getting mobility. because some the inflation with curious changes do landscape, picture one of behavior you with consumer that Just was certainly the inflation, on on see the of kind how by the just is Europe in is in amount US. global your I'm just worse it than big here impacted of

number of timing, Any any specifically, first the initial would just helpful. launch, Tim more be So can you launch, that question. at products was And just the clarity then perspective the geographies? a on assume

Sue Nabi

Nik. for Thank your question, you Yes.

again, around quite momentum consumer that fragrance momentum now on see is continuing Again, the This QX. when quarter. US category, behaviors, to consumers the during the there the through resilience happen since comes quite So we've category. specifically do seen spend first the continuing is part, the several we Prestige clear. to is which to and is starting in is today some on also -- it The quarters the

happened During in is QX, Europe And far under XXXX also And it again, very Europe. this remember, levels. new. was

XXXX levels. above it's Now,

was I the business So category, of one until all is is as fragrance in this mean the this all And biggest China, biggest business of is, you category -- of Europe. in -- Prestige this category Feb. fastest-growing the I would end of say of Prestige the fragrance course, know, fragrance

to the be happen lockdowns will what's Let's lifted. see once going

do lot we are highest to these inflation, are this first fact today. therefore, shopping restrictions going going festivals, consumers important et And back life. come a step cetera, are et et is summer to these stand two So, It's of are keep end. consumers what They the of that the behind I of is anything cost going that cetera. in where first at except is travel, clearly, as in of since people Again, for mind articles lot despite the we summer a years there a mood. resilience consumers, who and to goods to good think lockdowns on half terms see that's the almost China, to happening I consumers, do therefore no positive it's and to very market, sold in of seen second today they the about We've post of categories. a see of that on are published be believe a and backing cetera, continue

be life to and handler If if down hunger inflation for have consumption. is So, probably pressurized are we is the continue for there going that is this that which categories to beauty that's some good -- is it of than division. division slow prices, are may that the is a elevating Consumer be that there our of a a there news because do consumers the strongest some because may Beauty ever,

are ever. than right the doing the past. brands than right They much versus themes. launching profitable more They Our the are are coolest are products that

have them from equivalent of those profitability Some Prestige. levels to

divisions. going So, say to a our I would way, happen, that whatever in both is to we will be with able, adapt

So, during as said and going QX any key Again, clarity this on and fantastic the launch. very several things see you'll this things we times, to happen exciting coming it during launch. is

Nik Modi

Okay. Thank you.

Operator

Thank you.

Wendy comes Nicholson with Citi. Our from next question

Wendy Nicholson

the down in target Hi, to on comments. prepared know question the of bit my first has the million I do $XXX talked just adjusted you that with a EBITDA. little just

fiscal you moving progression And it's pieces about talk I target? terms to But terms margin can of think of of the the know that in of is function obviously, primarily any was about early, the in that, Russia. everyone made exiting to that headwinds revision but progression, you XXXX, a point I given confidence Thanks. that EBITDA facing. just gross continuing your margin talk other

Laurent Mercier

from QX So, has Russia very so all, that fact I limited EBITDA standpoint. very mean impact in and clear net first that of did in hello made we Wendy, revenue

$XXX new that inflation, year we million we we and and amplification EBITDA is not are more them So adjusted are and that's implement can we year. see ago. a headwinds are And started very why confirming but inflation something that the something there some -- again basically, than we of clear full on definitely,

We on, office, have working which again, implementation. been a price constantly increase has pricing

mix single year, digits ingredients all shared have but price We with and this And low we this on so I continue increase. on. the combined again, before

Beauty. really investing this us Consumer QX, that keep we on explained definitely So exactly gives Prestige, fuel both was the in what

gross this the margin, and EBITDA. amplification and filling expansion A&CP in continuous So of our basically delivering

are is definitely we what this confirming. So

an deed EBITDA. forward, more terms means impact, doesn't I from algorithm it but line standpoint, moving Now, okay, top or baseline, excluding ongoing on from change, next mean, a the Russia, HX the on year, either in in as impact definitely that Russia an of

Sue Nabi

And much terms momentum. add just we momentum Laurent's to we behind our our are it happening Again, when -- reinvest to of and behind important reinvesting comment, very fight on continue what's and SIM, super in or super, branches crazy that we it's like brands. to

ability say, to behind I gives the So us, brand being would the in continue of terms this A&CP.

Wendy Nicholson

then, I had regard I with to if just question And Fantastic. a second China. can,

just in the generally. you some on really the supply comment market China and of the there's long-term brands? group, anything of Chinese huge Thank you, makes marketplace. we're the having of players terms China back lockdowns the consumer that some the pressures with pressure step much. think you versus from just comments you Western can other seeing local China their a a beauty the in growth function Given the chain Anything Is nervous But of the and beauty your brands preference changing the lockdowns on obviously, for so the market. are for underlying challenges? take Do take potential about

Sue Nabi

there. to the to Thank tell you think, that have a anything continued is view Wendy. we over Coty on And clearly And focusing daily that figures we are again, outstanding on, seen you've a you, there. this that is basis, I question lockdowns, I how market this, despite reacting can has

Prestige China, and and if but very, Burberry just travel between one-year-and-a-half half a Our brands engine, or have overall of a retail. Today, really Retail ago. I made which their were also is quickly company both Super-premiumizing, new businesses makeup, like APAC, in fragrance in fragrances growth Gucci do very business Travel evolving. We is may say.

also getting these profitable from more XX% fragrances, this our, and strong more of brands brand. a only say, certainly about an than changing confirmation obsession I items is are fragrance the very We of shopping, premiumization, highly Chinese from sales brands, most equation, expensive over but it's ultra desired having that and desirable there, highly are would all now consumers coming P&L premium much this

any sellout the luxury terms that we've the company would the I for biggest – at to -- probably market, passionate to say, the continue sales that market still in ever of terms in All been I'm world or the that that not the become continue China, the the And probably but in and top So these I prestige the to market. have, confidence me, market. this give years. are to in the than I trading in don't in portfolio a fact Chinese for QX market only Coty's what coming the confidence XX% say is in beauty would see brands this and I been ability fastest-growing until in do most going look you confident that's the companies there would that's which most obsessed in more when we last me the far explains beauty say, among quarter, in be are expert fact of above with this their most to with during of flattening, beauty grow XX elements, change up

Wendy Nicholson

Terrific.

you Sounds much. so great. Thank

Sue Nabi

Wendy. Thank you,

Operator

you. Thank

Our question with from will Steve Deutsche next Bank. come Powers

Steve Powers

Hi, good you. Yes. Thank morning.

algorithm, back guess The six you it about look terms and play exit strategy that want is morning with employ seems way ago the one cycle-independent? strategy described year that the unchanged. weaker back consumer US is to continuity is little just pick November. in change To meant forward. and to extent the priorities algorithm like Europe you the in of previously pretty way as unchanged. the sort The we priorities So bit a strategic it -- or story think I priorities those just seems the Wendy maybe Russia all on the adjusted see get does the and the seems economic in with in essentially to in much and to unveiled discussion It for that really up continued does the markets, Nik. of emerging at get this be that a essentially you that six to those of I you and volatility

Sue Nabi

more the strategy to the the betting there nice of strategy. division the strategy. blow other the know, the lowest for strategy And way, again, pricing and tailwinds that, specific any It's -- is is more to on kind of is other, you price one mitigate a the a the you what's or balanced have that strategy Thank in And here one or could us think I than beauty six-pillar means the I the region not – would that than betting not I present whatever from categories. it's world to going on say a would that betting the, really question. it's may on a take and to happen executing is of or anything that say, the

do So consumer have but worldwide. Clean the to going Clean the When back month that for comes Beauty I the are would do say, that looking I And some is to good, we lockdowns the Consumer have very it coming, these now this cosmetics, now than would that is seen quite above And is in not would makeup and be that last do size skin see skin we levels globally these high would whatever is build we market ever so we presenting in on that that care, number believe seen, continue. even in this strong cosmetics say, is grow. brands. new clearly XXXX. for. Europe focus care very, or would that care, much globally or which of comment and target in a you would growing Three, come kind if with can fragrance before. only growth we ability say few from going shopping be we've there same I Beauty, element can of momentum to are might that, maybe pure in color in two, one Prestige say, Prestige of some, have I made consumers as China to clearly, Beauty, in but therefore, love And, Prestige, would we our to slowdown is believe that CoverGirl, Travel launching company are opening are people to care. players air, new Retail adding Prestige fragrances skin category, SKUs These on least, the to example, the the about skin growth it's for this makeup more And All not in brands. the consumers clearly, the brand, a are doors, primary today we by back are middle side businesses is massive very the case fact, cetera. Consumer a the just And months players. and to Beauty, of in skincare acceleration growth of hit for share Beauty market makeup about easier imagine, thing five et continue on in And Consumer we be talking stabilization, the have small, you to to

there going take time. is So to

big us the years like are since that side, are care always players to we tuning cetera. each best learn, the et and Prestige accelerate ambitions skin to in we done pure We But correct, help fine have X.X our agenda. on everything implement, today, going brands have

hopefully aggravating between will headwinds this price which anything categories, made of would that algorithm in tiers, of we And So overall, balance again, kind beauty allow divisions, a us don't did you have I is change shared have. we see the to any mitigate November. with that

Operator

Thank you.

Olivia, phone question on come is mute. Our Olivia will Please Tong with Raymond is your not line next sure open. James. your from make

Olivia Tong

of the evolving But recent you should supply or I on holding had first the a views an consider the constraint responding be wondering, real whether and question not different your hasn't Good how Great. quantify could And consumer and Consumer other issue is has dynamics. Thank was inventory because inventory you're environment in to environment. the the be Beauty how you. balance would others increased lot my unlike quarters. market much is around you how may potentially and if inflation more versus may makes impact of supply you much morning. in hearing

I'm think your versus curious to Prestige growth how you and ability So price Beauty to to continue to Consumer continue your in drive mix? about Thanks. drive ability

Laurent Mercier

Olivia. Hello,

take So part. I the first will

facing see and So and seeing basically, we best service I whole level is global an the supply said, are performance. that in among supply which we and some we you're investing procurement environment, XXXX, well this in But quite the and mean, we navigate as constraints. industry chain you in know in

can dual agile. we are absorb this all we them, can level. very are issues. a But So issues. that We we this sourcing some we are and place few indeed as solving actions so create these in flag implementing potential that put basically improve the keep approach, remain actions we We really have several service and what explained times, we

reviews adapt products. in a way to weekly We between chain. how commercial we have We the supply need in and allocate

definitely, are absolutely all focus chains. and supply controlling of monitoring right. keep we this and it is we good And this you're what So doing. is yeah, Inventory,

the but at cash, time, the build to same managing hand we where need do. some some inventory super being and that pragmatic and routine resources, on we always so agile one the indeed And

moving So definitely, year are doesn't this this XXXX. is towards we our what we change that's leverage that it times but managing, And four always of calendar cash end constantly trajectory. the frame are why in

Sue Nabi

that we are is issues And moving which trends components. keep et I around had, nothing of terms Olivia are we part, what's is before to which please in to know the supply mind CoverGirl, second the that the with a had we shortage on brand But Laurent's the to that seeing, looking cetera, second on is at, do happening compliment part. in seeing everyone for chain answer

the with to this line that in pandemic. fact, decisions prior not In made was some were

XXXX that done season we key should the availability CoverGirl. part mascara the but somewhere So of have the delayed have in the done some not were that been of of things

to we something something mastering. not It's to are that in it's are So that get hoping we improve.

finishes the knowing part, this inventory who to and how Prestige So in consumers I we products, When terms Laurent do part commenting. that, every have and do spending see second it increases between specific on to number the very, was items that, not one, to that specifically someone I and we that's point to for the of we going shopping are consumer? of job are the $XX. believe new each comes done supply pricing over that room, felt price on is difference there enough is where the price for $XX and former think be who key doing to big brand was the very

to some do So it for won't in the of has believe of the we the Beauty, because Prestige, new comes best-selling CoverGirl we the up of under example Prestige, it knows see $XX. between that therefore US there one of everyone ability if for impact. you of the foundation at again that take granularity and When Consumer things, of selling price and kind because and any least $XX of I has the $X and CoverGirl desirability foundations the best because impact, done have the to way Coty

coming very $XX, $X like or for So which say, foundation ability this either under Prestige. compared would have a is between consumer very, for categories affordable to that's to, something that's the still I $XX other there, to we direct sell from

consumers, to tiers invest be that's that and what adapt able confidence the be start. focusing going least to So behaviors therefore we depending on people going where of will to are to are the we at different whatever

Operator

you. Thank

will Wells from Carey Chris with Fargo. come question next Our

Chris Carey

morning. Good Hi.

of have So been items that follow-up morning. wanted I to discussed a a this just couple on have

the or standpoint. a time a in this there anticipating targets, on as a anything as else China, the two is secondly, in you inflation, Is give XXXX you divisions So by drivers But a the the track laid of you're would some – to pertains of going supply Beauty. Consumer balanced you out? can in take the going might long quarter profit chain, initiatives us to the fiscal I between more able now the underlying from perhaps first, business strategy size unpack between to much. just you the it bit right the the appreciate on spending, delay Thanks on market in there clearly, a that's certain margin investing view market then a those that that out. anything QX context And be just so was there of with and the to achieving here? to quarter on place

Sue Nabi

Chris. Hi,

take would I So the first part.

Coty, So you see explaining margin can as journey tell question. of Consumer valid gross start the What Beauty. I gross implementing in for absolutely I margin. first of global Coty what it's that, same consumer will expansion is the we I'm on beauty, margin drivers we that with the are a

very Beauty, the the we are initiatives we see, mix we of, Consumer are these all examples, working think all of improving So, we in new launching are the I and innovation equation. that the accretive on lot in guidance, gave a again example

So, this expansion. is in definitely headroom some giving levers us or of terms margin gross

course, So, on of this is, pricing.

element, in and Beauty. revenue with all Consumer the and at to working And also promotion the creation. of in trade on management, drive value specific third pricing pricing control team We granular or this terms context very how tight a level

the we fixed Consumer continue, building margin, discipline for on again valid density. and is fueling absolutely are increasing we chain vicious So, cycle is what this supply keeping Beauty. cost, And gross and the is describing this

what the of QX we course, great kick-off investment in to and and be machine balanced. in we the Prestige we significant is have going will initiatives in because more have So, explained this

Sue Nabi

half which capabilities, algorithm what the the the Again, or point to second which say, is to and China is of China, in we of have up around XXXX are anything going on more are our Coty I terms expertise, to a less view done one continuing the I today. in trying XXXX and working see sure are target? moment, And in to our is part anything NP to there we we we implement what jeopardize that's fiscal same is don't China, thing do do terms waiting terms ability if may the jeopardize At from of in are was would target. behind we in the to which that that will things fiscal make brands of Coty, that to entailing be and were were for I the of the post-pandemic. needed the We're everything and in fixed, when year we we fix ago rebound trying middle say, pandemic doing to a

Operator

you. Thank

Our last Stifel. question comes Astrachan from with Mark

Mark Astrachan

this before talked thinking bit with markets? Yes, being thanks lower term. percent and point, other about of category to would fragrances longer China, you share hello think spend. wanted that talked It as everyone. kind seem, the seeing of I today growing the what it a more in but that trends development at does similar I there? guess importantly, maybe think to about, Could And a remind How positioning think then category. I in start is obviously us about total you some beauty of them compare going up your stepping you do about of given presumably of more bit they you I how you at directionally have do you. competition about relative And Thank anticipation a more in kind think how fragrances faster.

Sue Nabi

Mark. hi Yes

let me different the pieces answer try So, of to question. the

you using in today have basis. China the on China. only a country, fragrances first, people So, X% daily of

who this as can you Gen drive are be specifically I moving Zs just would of terms would are to -- this, XX% the consumption, imagine, the say, and going who able of buy in fragrances jump huge with people X% So, to a I to use on huge, new. would fragrance say number

And of country is the us skincare. fragrance XX%, So, of XX% the -- China under like I'm far which if in yes, makeup. is around reminder a XX%, not Prestige wrong, is category the XX%

daily fragrances fragrance. fragrances basis. skincare is So, the fastest-growing is only in share X% clearly, and on But the a and And makeup then lion's category use then again, China.

where of to I biggest and be category smallest fragrances the the fragrances skincare. the is, where the So category this to compared is think, US Europe

with I upside Coty's things What -- say, us, in to very that's again, is very, we you say. up may anything today potential portfolio, in competition gives that's how that we this And I So us, seeing if Honestly, else an the love are they is that that terms We like missing Hugo telling brand or respond would a shopping, probably strong. not are Kylie, are are Burberry, few China? very, competition we we trends, criteria are are to in to what see for to what mainstream Boss, think consumption. fragrance the of name ability another our for? one, categories are Tiffany think. brands the in the looking Gucci, the to have what do stepping do Clearly, know how we people have people

that years in we just premium this said this brand almost category our I was [indiscernible] the by of sales XX% again, so in made on-year-and-a-half are is Now fragrances, nothing ago, present while this already of turnover.

So right behind consumption we that feeling are clearly we on are Zs clearly market. Chinese price to tier right have we do seeing the the that the surge plans, this in answer Gen

at this investing, market end of the because will and at to promising need day very, of the of grow that's the fine, we all So the the investing to this be is end very competition us. market day, altogether benefit on

what So I would that's say.

So this conclusion. was my

Sue Nabi

much. of And to this you quarter thank the for same at future. Coty for thank Thank much we very, good to very I'm you do whole the near say going -- team to you for Thank you your continue seventh and the much in questions very very thing this to hope results. very

Operator

event. Thank you. concludes gentlemen, this Ladies and today's

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