COTY - Earnings call transcript Q3 2024

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Operator

Good morning and good afternoon, everyone. My name is Ashley, and I'll be your conference operator today. At this time, I would like to welcome everyone to Coty's Third Quarter Fiscal 2024 Question-and-Answer Conference Call.

As a reminder, this conference call is being recorded today, May 7, 2024, at 8:15 a.m. Eastern Time or 2:15 p.m. Time. European Central on that at X:XX approximately Please May p.m. note X, XX:XX Eastern p.m. or Time Central release Relations a webcast, issued European Coty Time, press be on which found and our Investor website. can remark prepared

Sue Nabi, Officer. Financial On today's call Chief Officer; Mercier, and Executive Chief Laurent are

to actual that where reports the cause would that to contain the the SEC, may company from statements. many filed comments lists the could and like I statements. earnings Please release of differ materially today the facts forward-looking results refer remind you to Coty's forward-looking with

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

Operator

question Falorni our And Citi. with take [Operator Instructions] we'll from Filippo first

Filippo Falorni

sequential So for mentioned I give the you to I have But One, of in you 'XX. August. a questions. in X you're that in understand going that the first quick acceleration fiscal release like-for-like half in sales 'XX guidance expect

So can give are drives what and the you drivers color some of confidence the that acceleration? what us maybe

the And then business. on the Beauty Consumer second one

How called parts that can in You softness mass do like-for-like sales the U.S. the softness drove some think you of business? that last? cosmetics. are out what business And long offsetting the the in

Sue Nabi

is This speaking. Sue

time, are the this this year. indeed for on comment this in quarter expectations our to results giving opportunity So again, you that us time for thank this XX and third of guidance above above

and from the We've growing us half they're Prestige, in performance see as we know is, QX. this confidence to double market QX. it, sequentially an to is the quarter, first seeing acceleration digits, outperforming in giving the continue been during which Indeed, are to see you

dynamic. very is market The

like the seen this in in quarter, fragrance markets phenomenon, market it's in As the U.S., also versus a it, you is even just accelerating and sequentially big know is Europe. global Prestige last not

So structural because continue market we index of which going outperform going that the we are to on dynamic We market, in we think expect be we drivers. to to are terms sequentially numbers from a QX fragrance selling. accelerate this continue why explains dynamic the believe very of to to

growing the confidence. for what same the record the of gives rate. being So these them brands continuing us at brands Thinking We've double number one, double about grow most X digits the a company. this last of and track this to of most large year, Number last growing of seeing our majority the them, brands. year, top fragrance of digits continue is

We more potential, or Burberry, other cosmetics the the fragrance innovation franchises would have color highlights than indeed as Burberry in such is fantastic having overall today also pushing halo effect It's globally. say, performance. but a It's confirming great on the Goddess #X a portfolio superstars its the potential. I great, brand, today huge the

with across that on of markets around increased world. the Goddess And this the different is an build Burberry to over and time penetration continuing top

is about the ago, Jacobs. is And year-to-date. this which innovation, thinking fragrance have Jenner Cosmic the arriving. months Kylie Daisy that another we also have We I'm Marc one, also started market market, innovation calendar Wild the innovation new #X X.X which U.S. the stars that's U.S. in a of the second #X from

Chloe, growing Davidoff thinking Burberry. said this, I digits. thinking double other as about of I'm and I'm it brands of So top on before, about course,

number amplify which in track to us competitive we time, the confidence of gives launches very record increase a continuing and are we are to business. successes, So that really are this going the fragrance building that that of stand to this the what is test going call hopefully

you are was about from do remember, innovations Essence, very thinking as viral. We now. They I'm Wonder'Bond last mascara about of Consumer becoming innovations This the CoverGirl about I'm continuing the cosmetics LipStain, to latest about CoverGirl color are to mascara, [indiscernible] pace increasing The is to all that's also influencers accelerating the the potentially around innovation. year well. happening thinking the are world. in I'm have which of first the story bonding that thinking Rimmel Beauty, CoverGirl Beauty. is speak ability industry. Consumer this

to other innovations. going All are innovations in that be to pace earnings of going increase these said innovation. you previous the And are by we to amplified I call, the

things we going believe, well. to to give the confidence going is well. us elements the are these continue to And to do get all continue do that market, So beauty to

to month's become fragrances last -- be. mass, U.S., to -- what are Prestige But that strongly. we better to especially mainly the also is the saw before. in driven is the figures the care we months mainly to And U.S. them bit The see it's the continue grow mass rest very but want in of structurally than body that world, color a figures booming. not we are cosmetics, -- market,

that this see categories, are improve cetera, and we cetera. hopefully, the new believe going are premium increases, of this to clearer inflation, price So et innovation, consumers will of shock optimistic, the a we shock the buy et they to continue and will after the we think picture

what in not offset that but if strongly Categories and differently. strongly to growing body, body, love call It's very the to that are accelerating. us premiumizing, also mass skincare, behind for is very, skincare U.S. very want name weakness I'd regions. the this it you as behind it. and to market also is And is indeed are we area globally, we an fragrances this So growing only allowed because categories

in And we all building are also regions. the

the rest Xx we represent that the the what -- than XX%, is almost Our company. growing engine regions call new faster market, of growth

and maybe answers others to did also got purpose well Last the least, also so but is Retail not on Travel and answer that upcoming e-com. long questions. I doing fantastically a the

the Xx more the you plus regions, Retail, have classical So company businesses business businesses, you new Travel heritage half than markets. add almost the new of faster e-com that's in if mature of the categories, growing

Operator

our next Chen take question TD We'll Oliver with Cowen. from

Oliver Chen

Sue it impressive. And guide and Was results to very momentum seeing? to the looked geographically, really there that opportunity you're higher even the strong Laurent, be continue given across markets.

you could you're customers versus If what help contrast perhaps Americas Europe there? and us seeing with

the so think clean you What we as very fragrance normalization like then expect trends. partners looks are the do to sellout inventories if likely happen And robust? about your category, it the at given KPIs retail with are all

Sue Nabi

the of the you the I part normalization question, well. hope I very maybe is as around wanted which Oliver. you, Thank are with call fragrance it. to we start last

indeed, now, earnings but this during of was So hear since happening even was not trade a reality the year call it's referring in everyone accelerating. is last it is when normalization, something kind other people down, this fact. that almost we And The call it's some slowdown, that to it call.

So we see to volumes this thanks accelerating, to and premiumization. thanks

at So recent David our In of such it's the it's across also tip see mass that And including question wang, not a the launch the from full the pricing, we as most growing. fragrances volumes premium Adidas. Paris Beckham, the To are iceberg. Vera board. way, this Infiniment a of Coty just of one, fragrance index

a category as are You to continuing or and good a a clearly price tiers and booster, less. as connector different use see continuing mood fragrances social feel all these to consumers more as grow,

will to the this markets. So higher as continue dynamic not going than we But in to about were it that ago, category levels. years see historical X believe grow probably we still, it be some much talking as where growth was levels we at mid-teens are

So already was achievement. who growing when remember it X%, those an or fragrance pre-pandemic, business X% was

high here, mid- something So is time. Fragrance that going we to sustainable talking for we which believe the growth business, are is to over about single-digit be

I second doing Now the skincare your in Fragrances markets, is Europe have Europe. dynamic of between well and contrast around are very to divisions, that also very very well. doing the in both both doing question Europe very Prestige color cosmetics is well in U.S., say part is in Europe, the

cosmetics ability we the last figures good the price month quite as with on almost said I connect continuous on, months the with to put a low-income social would way that pressure that the consumers the getting after market, the during one previous negative. say, is Europe, picture color these believe the, difficult month U.S., I were this in in before, the increases premiumization, would But we consumers, In moment. better compensate it another would say, as to the this, mass the some see of category. this I the I regarding say, compared the -- where media continuous as rate the except or there, of more innovation But

is for class our probably believe I higher? X% even guide performance. the an honestly to end It's has outstanding XX% among now guiding opportunity there everyone fiscal of in best to upper was almost finished. Now that that at this peers the

I proud So a everyone in a figures or this. tell QX company of terms what for performance to what that And see we is are super is looking who's this we you of. are good around the at for really believe we confidence did again, also element starting of

Operator

America. take We'll with from Anna question our Bank of next Lizzul

Christian Junquera

Christian You Junquera for on have Anna Lizzul.

the greater marketing? where particularly of now of the And the and potential sales for Can drivers see you do e-commerce X/X mentioned talk quarter, was business. your You from about representing strong e-commerce? with you about in this innovation

do of you Amazon's to also, with launch launch e-commerce Beauty products retailers expect Clinique And similar on Estee's to Store? more

Sue Nabi

for of Consumer very of it's Beauty, out right of you the growth Thank much you growth is, under the are bit question. it's which call little the to Prestige, in Indeed, In division. for the division. example, half totally of half a the performance, the e-commerce Yes.

outstandingly grow this room lot a to are continue still we of compared And our channel. peers. So to of to on we performing some have

where we right really the doing area are So this is an things.

accelerating, a lot grow. room of We still to are continue to but with

precious where way, CoverGirl do lot only explains of has remember, in marketing the we specifically which people the CoverGirl the growth is loyal the of of above communicating this that years really talking In And performance? continuing a were, been winning is in to of the one years I It are in big in is this If you is the a with traditional way where big, market X brands needs. a brands take as care our this our our a ago, just Consumer the take of astronomical has base division, a where consumers, that way, Beauty still What old. part way. digitalization XX to a to U.S.

moved were advocacy cetera, et search funnel we et where U.S. tools area. such marketing, the #X with not ago this using have we But And goes on The terms from EMV and CoverGirl retail modern cetera. influencer from all competitive in in that we U.S. media of EMV in very the the done the #X a it as latest year the marketing with the to progress market.

on Rimmel This thing, you into the overperforming to imagine, can in Same bigger U.K., because explains we simple moved as instantly bigger by where month. brand of way, why as a the online as online, lot last this. from translates #X are we nowhere the sales visibility

say, So would performance. I this what is explains the Beauty division, Consumer our

to in are the it of And Goddess in power we of Consumer penetration doing one of too. quick into playbook that buildup very, the in the is where powerfully Beauty also the Burberry Prestige one the launches. launches implementing the performance. different see and the an and drive experiences we really search, first using fragrance we are results this This used are area into with you was the very

less with thing doing are same today or the Daisy Wild. we And more

king social the As you is know, of Jacobs media. Marc

be, Wild for will on channel. sure, key this Daisy So a performer

can sales a the thing imagine be XXX same The can going big. online as has you Kylie with more million imagine, followers to Jenner, are name that very, online, very Cosmic you than with that

job explore this is with the see So Amazon, by this brand brands retailers. are, do The and This job going but we Are can a with really doing to will this is opportunities is these of great continue strategies what course, extent the we answer yes. performance. great sit we with which driven retailers? to key

Operator

take We'll question next from Ottenstein our Rob with Evercore.

Robert Ottenstein

some of call, on kind important. it's you touched of the but throughout this So

just go these So again. let of through me kind of some

that's acceleration, has of number the one. of Retail? market to terms much in So do question how Travel So that with kind of fragrance

continue has sort There again, to is of I'd it, in Question number two, chance and get just to competition for -- the you Burberry but a guys been on run. well. know incredibly is to area, you you increased do I a fragrance elaborate touched but love more. home

the of you're right, Cosmic. Jacobs #X Now Marc #X, with Daisy, Kylie

some around that. stuff of You the mentioned

the could competitive better allows you just else? advantages versus than maybe to your fragrance you sort unpack everybody of But the do in that market of competition kind continually if

maybe finally, talk timing and bit about just then on little the Etro Marni. And a

Sue Nabi

Thank you for your question.

which part, around U.S. is really rest. much at I how which really the how mainly, core core is on top day, much of that's and end And the the Europe, the is Retail. first performance is booming. would is Europe, are So on U.S. Travel say Retail, it's based and that Travel a

coming comes X% over the Retail Retail, represents just which to are Travel on X% specifically driving ago. it So revenue, top. And you is Travel totally from performance, indeed, net years not right now X.X call this but company out of

but on skincare. overperforming also cosmetics, business, So it's also color the we Fragrance a are on in but channel where

that we Now believe also crowd ways mix ability locally, and in it's to use all, fragrances, to going on when to data, why doing making that's create that what competitive create to of in a creating ability to market, use comes of, I use of a from consumers ways is finding understanding globally, sure way stand create we of juices good very working, resonate are depending blockbuster it this of the call ways first individuals. this that not but advertising that

of be be take to Traditionally, who done in always or height. sometimes, brands, well from last sure doing this are a been new happening, in the to what make we've whoever super, one underestimating way leading understand to do for what brands we elements, that without people you is it from that years, individuals and This but to it try the super is, to to the going both it of has independent happens have still, course, the what brand is the organization is is will But finding very this to and whatever, important. is a power time and individuals, again understand the -- resonate. several X time, which ways is something

company. cetera. going I intentionality. what you is when based say, test you of, of is There question how course, to also hear, but this something say important, the This talking about be big is launch Intentionality we it's ability to the would a what et them, consumers see, on is on based, is of products very It's that data. are our

a mix also it's but be of to be organizational ability to So and capabilities, intentional ambitious.

a Last but more question more not and least, technology. it's also of

Coty art science. the XX of first industry. Paris, increased is how hours technology, consumers. technology of have to And for Infiniment heard uses fragrances. for the minimum. line Each of of every You've understanding the the is artistry this latest for and last coupled This power company, longevity fragrance and This this the is much with at launch time and

a Etro fragrance Marni. has already your part around Last -- line. of Etro which and question, is Marni

into done, we the as be and line say. this in may fragrance integration this And ecosystem, terms the around will soon line which I all registrations will as if instantly to net So brand are fragrance are launched integrating of revenues. base XX existing the world, give this

And brand in on we I fragrances that creating of would say, course, working the the equity. parallel, represent upcoming the, are

new but today, work announcement we we the at see from And X There months the same we X is moment few these in almost arising we the made believe years, Marni brands. started thing. a that things that next existing isn't ago. business And to can a

Operator

Wolfmeyer our Sandler. take We'll from Korinne next Piper with question

Korinne Wolfmeyer

then touch and into that as algo? seeing of think morning, new there's I'd if of thinking baking kind in growth and seeing you're the you're the we the how any Congrats and there's there? partnerships these the on, what this headwind we first, longer-term should one East And to these -- about on then quarter. be the coming if in announced on any Middle about you're contribution change to guidance like the trends

Sue Nabi

Okay.

of the again, digit the East fairly revenues. it for the when Middle to this And mid-single percentage first part So comes question, our accounts broad-based. a of region, it's

seeing So this is first business. we not present, in change are a element. At the the

a fact, mainly we which in is even are I seeing our In well. the have that by strong East, Prestige, Fragrances say driven to Middle momentum

is East, seeing this in So Middle the nothing are today impacting what we there. would be materially that business over our

consumers. company. complementary our Now is are licenses when also that because businesses current new main they ways the the are it audiences. portfolio. new up businesses And new build to They bring the to to been of these comes to can incremental and chosen we idea to to licenses, It's bringing the new have really These bringing working the because end chose they visions, believe talk together. we are are where brands new regions are

the In obvious. of obvious of it's case Marni, also case the in Etro, it's

about think Jacobs like the cosmetics, cosmetics which of of the company color you brand, it's unique what Marc portfolio can is color to like very Coty. positioning Jacobs very of also kind bring brand to obvious a the If Marc this in extension license [indiscernible] market. With a

reach audiences way additionality, that's over really It's So time. all see bringing the it. increased targeting the we new of that company the about

Operator

next with Teixeira JPMorgan. from We Andrea question take will our

Shovana Chowdhury

color to mid-single fiscal similar This gave quarter? quarter, base it been on Because be mid-single headwind you mid-single-digit the digit, expected hit quarter, period it's of could half is Chowdhury consumption expected low last but is the Andrea. not now it seems digit. raised when please fiscal And second for more fourth the guidance the to it's wanted if if is the third -- to in behalf to was on that ask to now restocking for if Shovana versus I you from more confirm you specifically, in shipments.

ask wanted of Beauty. Did little of of Consumer about to in forward bit see pressure segment some could inventory put that have you LFL your quarter? fourth you I also, X% a growth building pull fiscal And in this in

Laurent Mercier

So first that is are making really the making no set building we all, there and there I And retailer inventory it's a aligned, mean, selling. of sure So is strong between fully are consumption indeed, sure that at are that level. okay? shipments we our out correlation

a is very healthy this equation. So

debalanced indeed, times mid-single-digit earnings fact a in shared in then I about mean in headwind will it QX, mid-single in digits we minimal. there several be headwind share is very located Now was very this that But QX. and the and we headwind And clearly definitely the indeed, QX. last and is QX in QX. QX, in the

But the earnings and from effect during recovery base pricing purely again, also really which shipments as Sue great year, really this done innovation. last the was call, level explained is service of

definitely So we change this shared. versus is no what

So mean, I indeed, single digit, in low as digit explained, was we HX. mid-single

many -- what months. have So again this been is and for saying we

Operator

take from our with will next Tong We James. question Olivia Raymond

Olivia Tong Cheang

Great. Prestige in the XX-XX My around XX-XX obviously, Prestige from between to has versus pre-pandemic. given mix question procedure about is primarily mass strength mix the shifted

So nicely you've obviously that clearly this top target on seen gross volume mid-XXs margin nicely, pricing the to you growth target on drive as has well. helped of to your get

as the go embedding has push margin? overall your in sort premiumization? of changed of gross mix to business? a going how of you further can we you Can how -- the in that So much are price forward continue volume what And terms of terms management

Laurent Mercier

Yes.

what I can mean, you significantly is But weight our over years. I gross I definitely, the see has Prestige X that indeed, margin mix, So has overall, mean improved mean last increased.

gross this below a that which were XX%. So we reaching And of we of are at you was margin. level remember XX% now level

divisions, in this definitely many actions savings And the coming on margin brought share is is that So really productivity, I of from standardization, that we place this gross gross clear in in both want significant productivity this put platforming that okay? examples place, margin. we expansion we to initiatives put and all be a very and

So that's one. number

result Definitely, implemented targeted pricing. price really we expansion. XXX And increase on the QX margin in very basis is point some the with you see two both Number gross this divisions.

on again divisions. So what we did this both is

work, And definitely not on least last Same same divisions. playbook is both mix but on management.

really that work So Prestige, partner. all selling the are and know we you -- the all and it's in done now more more

category course, niche accretive. this booming, are gross -- and of We is, the is margin

on, in that margin. that But fragrance gross Consumer of accretive, we the also Prestige. cosmetics the very at have such had in we initiatives as strong strong we margin that And all new are color categories Beauty new mass level even sometimes and are the a also so are pushing launching gross and

coming divisions. So This again, strong keep in margin a expansion really that is mix minor. division It's effect. gross this not on improvement a really from both is mind pretty

this ahead see looking now year you the again So saw, the fiscal year-to-date. on results -- you and

single volumes are digit is and price You see high our low is digit. digit, single single low mix

are sure we balance in good mix and keep definitely, pricing. we that between also our volume, So making this algorithm

is both it again, explained, work I example Definitely, years. be as concrete is has doing last going pricing to And the divisions. between again because the we did initiatives, doing so what the to volumes, mix really mean be these not really increase But are balanced clear be we well continuous you it items. the on work market, on really growing level new I engine are same at lower will growth want X we that impact will X Sue we volumes, of the price all that gives

And we Again, equipped. continue are will very pricing in very targeted well manner. we a pricing,

the So expansion margin again, both line very continue balanced between and top these gross of in divisions. growth X terms in items

Operator

take question Securities. from with next We'll our Wells Carey Fargo Chris

Christopher Carey

does weak. bit and trends from seeing that I important follow-up brick-and-mortar? on e-commerce organization, in outlook imply, more that strategic contextualize of sequential a how I perhaps up global is overall the was just quarter. and the was U.S. your underlying you for XX% strong question. business think, specifically in -- quite U.S. that brick-and-mortar you're business or here, Can Consumer of brick-and-mortar for the over the really one So Beauty, then was On and think It Consumer a Beauty

just but is and more Asia we're a also higher actually bit but certainly exceeding driven balanced solid, are Americas two, what seeing by market are Travel growth, Retail Prestige EMEA, the in and then, which globally, And growth.

the about don't thoughtful pause of seem growth the whether faster to sustainability growth. you multiyear perhaps we've about in you markets that these with a might so in bit of some returns You're seeing of peers? durability growing they're you give Are that give as and little seen anything areas of your

just as So and globally seeing give Asia responsible Retail hotspots that far of pause in your longer-term you concept the whether as some growth any you're might in Travel objectives?

Sue Nabi

Yes. Thank you for the question, Chris.

So indeed, e-com e-com. the Beauty as was But brick-and-mortar not was as indeed one for a top division. performance high performer the the right, Consumer you're from

the But including that's we market. one way in I in say player, resisting a in the if that call brand, brick-and-mortar. say, way, what another to way, and is the among this we about think a CoverGirl, it is best historical brands among, big would a U.S.

So a we middle transformation are brand, the of in of as know it. this you

equity the equities. online doing of brand still terms is marketing. which score is would of the advocacy great market, of #X new fastest are U.S., brand with rate innovation, supported by I reinvention part the, the CoverGirl say, in the We in

color into of increase could we we care translating with cosmetics the for of partners that work. things the terms brand, online, brick-and-mortar I and in beautiful huge working hand-in-hand shopping there in also are our experience and to are this our are be reinvent what a but taking stores in All the see key penetration

also that of for sides sides. story and us to make well equally help performing will both both So are sure hopefully, this the

Consumer question the your for brick-and-mortar answer to is the about division. this Beauty So the versus e-com

we strong. The very comes market Now remains say Prestige when growth to the got Prestige, the revenues that during net quarter. good have double-digit it for to U.S. region, that in very a very, I the EMEA

it's to one tied So or another region and again, it's very not region. balanced,

But again, whatever in engines, and regions. best in it be could that of the categories for number happen growth terms or to you of be terms of multiply way ready is the can happen

China many increasing, start and regions, And more we the with or just specifically Thailand, of Vietnam, these were markets and the the are week the region. I in than growing in tiers. Xx price rest a are other are for visiting We accessible countries. of is more we fragrances, where be in fragrance also And Southeast rest very the where ago, both is markets high-end of on were the tiers Asian sides the company If looking were penetration faster people regions. the price market, portfolio, these very

for So categories, are, the growth the in color engine mid-teens like of but division, also in terms way, is a we next growth. preparing cosmetics Prestige before in accelerating never

are company. can It's been I get didn't accelerating. in are They skincare, of no And even quite each it skincare the inside once, test, test, for the of asked, is but X one but by is year question I equities the correct, if has learn, now answer And clear. and brand a performing, the learn, skincare brands correct. increasing double digits

even smaller, brands some triple digits. Some are the

of future, power the in in So and and what preparing are terms of both of for divisions. the categories, preparing regions terms we are using we

answer So not maybe that's a there, it's reality. here question the way your and growth I about coming would from

Operator

with We'll Jefferies. take our next question from Helgans Ashley

Ashley Helgans

head then U.S. can tell on expectations Congrats as us anything here current your you to quarter. the environment. holiday, the the promotional we in promos ask about wanted on into And nice just about We especially

Laurent Mercier

Yes.

mean definitely I we seeing So of not in any promotional are change major terms environment. a

are the So slight the following are increase, a of price mean adjustments. market. adjustment years. some which seeing done as was results is some last definitely, we going we really significant market just is I explained, X going recovery definitely, last we But through the through the over

namely across market are our e-commerce. is really, again, And brick-and-mortar CoverGirl, gaining share and omnichannel brands

it through it's premium performing innovation also So in really really we well. is do And -- really really fact. way the it's

products. high-quality is that And with coming So this Essence a a Ageless also great Simply success. and is what products. premium matters, pretty this launch The of it's is

making increasing really some about with within are we giving are game. you is And we munition Coty, sure product So not that that see playing not high-quality promotions. and it's coming really that again,

Operator

We'll take Barclays. our next question from Lauren Lieberman with

Lauren Lieberman

why? comment a on are you've why, there details. may in bit full -- impact it's categories? just there's lost in I may why on I not of What fact U.S. the a allocating the was behind of the so slowing just Are it getting But but this perspective pantries why you happened, thoughts been differently? where they offered Sue, other or that morning, of consumers may And could kind too the Are wondering and mass cosmetics, stuff? spending? lot the have not think the then you if are

just acceleration And then next when curious, into backdrop year. just expectation last called night, obviously. you've on comp start comparisons, to and expected But first of that's in into -- be if that you growth the growth, got we sort out the know get we slide your ease? with category to algorithm look the as half of curious QX easier on I an

Sue Nabi

Lauren.

the the let again, that question, comparatives teens, your All first wrong, fragrance part launch It at all, the and growth, doing is the which And Goddess, launches at the of easy of correct the mid-teens, not half. quarter of to double-digit the QX with start high -- at which around acceleration brands of I in Coty. if was time. fragrances have Burberry division. this year the last it's So last launch something I'm Hugo were the was launch ever now, is of not the me biggest Boss, Prestige Gucci. was This under

we that case. say easy love cannot you the but So to, into comparatives, would not getting it's are I

questions. important an correct to that's before answering So point your

of going And move so it sorry, weaker when comes the your even to But performance, to U.S. of last a me few we believe the you points. I'm it category is by in part now a years. contributor benefit to things Number maybe to color now And cosmetics, be couple was by one, give the can moderating the you details, pricing growth first several the to comes at as are there percentage ready. more when I'm pricing, play. higher the imagine, definition, let So question. of

since easing Number some two, on here some historical and cosmetics was U.S. fragrances last are years, on in these stocked now the products. the we levels mass seeing in growing are in the dynamics above consumers again, like consumption

the important, consumers age are by across cosmetic and some are of Amazon we Ultra coupled in lower economic Related dollar pressure, younger which to the This such stock but penetration number there to shifting time, home, of groups. at one, at up that particularly has very captured stores. been element same is income, including, with as the channels, dynamics see, decline changing on new Nielsen, market, not this household the

color Number expense the highlighters, new and products, primers, consumption foundations to and brow about products comes at be thinking the mascara, to concealers, I'm two, used ways like about of comes this traditional thinking which when to it new shifting cosmetics. I'm categories. thinking I'm queen and about

That's been and we three, to are this. from brands what fact, has this et color even benefiting Number is because looking them in trading up, are beauty, health these the masstige that masstige And to see this for beauty, trending trading explains seen call up what channels and they part. cosmetics consumers cetera. cool we of Prestige

with as news to the good The really are that -- is changing Number in behaviors. performance with you've down it e-com, Hansen for about adjusting adjusting on actively company close Consumer in seen are doubling I'm are by a we one, quarter. consumer of X-X brands, the keeping this thinking like our Coty I'm about XX%, particularly where Sally last Beauty, CoverGirl, Amazon, growing thinking we

growing up thinking Number channels. General we like picking I'm are in or Dollar about Below. distribution Five two, channels

to -- are important, level old because towards XX also to penetration a consumers. and are on they reallocating the media keeping media to years younger but, above very is the this part the one We big a also continue of But consumption consumers market. keep right we with hand advocacy drive of are of the

also more that media. are disruptive, are distinct, we social more viralize on launching you've products and made seen four, to -- it Number

cool amplifying of factor brands. our the We are

day, in end in it's the global the these Germany, to important parts Brazil. all U.K., at Poland category that the world trends demand and cosmetic very as note strong solid, other of growth including So of in remain

the the same market will American So direction. go in

good in differentiator in ability point a to be of of sum, this, portfolio and again, the So the strength in competition. way, a reinforces multicategory company international versus terms of a multichannel,

Operator

take We'll from question Linda next D.A. Bolton-Weiser our Davidson. with

Linda Bolton-Weiser

first, Hugo that But different really about Gucci called comment didn't and out if on I drivers was those call you Boss, really out. like was things wondering fragrance, you I could are you curious Goddess.

general maybe could in there? the are you Boss, how plans how, quarters just So upcoming fragrance with in Hugo is on there comment And men's doing?

see And kind does it it skin a then you take brand? making I global expand curious terms Asia are it secondly, before anti-aging what of on to of beyond was in Lancaster, broader

Sue Nabi

the for you Thank question.

channels, sun So let remind European brand a me something and start everyone. photo not the is an Prestige care important mainly brand with the is that Lancaster in #X Lancaster. Indeed, is is the in Europe this to The is aging Asian brand. brand. or brand

competitive to brand So can some took Europe. super, China fastest it's a confront sun in Europe. the the It's big the how very mainly of in to brand one market. business And we growing see we

and on now other So be both it photo Lancaster Europe X protection acting categories, the you'd on on of side skincare. On Asia side. legs, one see

will X aging which X the legs, but and European and So protection, leg. repair, UV is brand X photo leg be and also skincare double-sided photo Chinese/Asian

is calendar your So going in, question, and this year. that that to we this year answers the hopefully happen are in

to comes talking like same more you fragrance brand, example, you is Now Prestige simply brand tell in brand fragrance a affordable entry brands. it when other because part, is quality Coty can at of portfolio Davidoff, the I time, the are for than the much a that brands. many this booming about

the digits is of also this see have more until part also accelerating And that and double more X these been well. all top doing well. our part doing the growing And Hugo Boss of the we market is inside Again, portfolio. year. it's brands last of end brands

important is of growth whatever company indeed, very the is this to a fall not because going Other plans Hugo reveal going listening But are fragrances, in happen to to France. Boss part us. plans. and leader, the a course, the of as driver in men's there, is competitors I'm like specifically there countries of huge

tell gaining market like one on that during the the share are overperformance last explains I companies Chloé that Boss Burberry, of in market the France, Hugo quarter. X of to country Coty only is a you have the and that French very competitive

Operator

Mark our We Astrachan will from question final Stifel. take with

Mark Astrachan

extensions maybe fragrance ultra driving those Fragrance. obviously And bulk is where it of some that pure-play on broken like that are what's or portfolio, between Question a I some accelerating segments designers and gaining specifically of your you're more to lot Prestige those decelerating of other ask or more how that? Prestige of I fragrance category on are the side, about brands, Prestige sort the less and feel share beauty out the brands which the wanted to others. designer brands, that the to think guess is also I have relative

Sue Nabi

including and designer a high of perfectly niche. coming market, that's Yes, question. brands, the the is and fragrances coming of the described the good from you fragrance brands players what collections, parts end Indeed, the we call of which brands designer X from few beauty

is that's best, part players. The the doing one these few in the that's accelerating

really I a But from and exactly companies not brand, So it's to or really to may them name, it's it brands to a of fashion competitors. It's call some less. fragrance pure not our are this. quote beauty tied companies that pure a players, fashion coming Paris tied not more is Infiniment going not neither this. And it's Coty or are player. to It's like beauty if

even regions next this decade. of are part for We fastest-growing XX% consumers the is believe shopping. X/X, more this the if not some the is be and where this to almost market, fastest-growing representing the China, market. in the of like And This part is market more going of is and the

have brands Then launched business, players. fragrance Burberry you Wild fastest-growing part, of that growing recently, we than as Daisy or less these small some is or the brands but is such Cosmic a Kylie have Goddess the collections with which successes of portion pure designer

looked is was trend part this, shrinking is would say, year I anymore, would I after decade a and way, growing And that I more a the really, the it this see than fragrance That's brands and describe growing indeed, not at not was last we fragrances, over year the which decade. that market. doing beauty path least way at last in the time

that where For fantastic of can these bets we very doing on us, And Infiniment are pure players. we we is area niche you one an as Paris this working in a imagine, opportunity, This Coty area. are clearly have is hard.

The are, are and -- posting a been going more. category something on recent which and successes is this the we to we really We of great in testament to how complete understand course, much designer we've double-betting brands. well successes are more

very, but portfolio ago more a with also Fleurs also des Atelier which well. audience. one collection Chloé among collections Hugo le very is also the Boss of year a But one fastest-growing was the This the collection, company, of doing masculine is launched

answer or less your I would that's So more way the question.

Operator

for And to call there at further this questions no speakers are the closing turn the time. remarks. I'll

Sue Nabi

very Thank everyone. much, you

expectations, I this is of that results X quarter think are XX another quarters, above years. almost

Thank the happy, way because beauty most super QX see works. and that is to -- for you we the going things expecting industry not So August most the are are exciting, we the you innovative, super super, earnings. this most the continue create in the And very trendiest proud, consumers to are the much.

Operator

Thank you. participation. conclude your This Thank for does you program. today's

any at time. disconnect may You

Coty (COTY) 7 May 242024 Q3 Earnings call transcript