Coty (COTY) 11 Feb 252025 Q2 Earnings call transcript

Company Profile

Participants

Oliver Chen	analyst
Laurent Mercier	executive
Sue Nabi	executive
Robert Ottenstein	analyst
Filippo Falorni	analyst
Korinne Wolfmeyer	analyst
Olivia Tong Cheang	analyst
Ashley Helgans	analyst
Patrice Kanada	analyst
Anna Lizzul	analyst
Susan Anderson	analyst
Shovana Chowdhury	analyst
Christopher Carey	analyst
Mark Astrachan	analyst
Carla Casella	analyst

Call transcript

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Operator

Good morning and afternoon, everyone. My name is Margo, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Coty's Second Quarter Fiscal 2025 Question-and-Answer Conference Call.

As a reminder, this conference call is being recorded today. February 11, 2024 at 8 a.m. p.m. X:XX or Time Eastern Central European Time. on Please p.m. at X:XX XX note that approximately February Eastern p.m. Time XX:XX or Time issued its European which Central Coty can remarks and be webcast, prepared found on Investor website. a Relations press release

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

could I would the and release that that non-GAAP specified lists the filed with remind now where as many today the comments factors earnings the like of to Gap] forward-looking contain Coty's to SEC in company measures may financial statements. the you adjustments of [Audio Please refer reports release. company's the section

will we that, line now With for questions. open the

Operator

our [Operator take first Instructions] from TD Oliver We'll Chen Cowen. with question

Oliver Chen

retailers is about your that's a issues seeing? on issue of of and what as sell-in Also are commentary Consumer you characterize the you're like sounds about there. an Beauty, magnitude are Australia more China a comments how Retail you On Asia, things cautious I relative when to would Travel but it not undergo on might China, the your sellout, replenishment large to mean what relative mentioned? total, your thoughts percentage

Laurent Mercier

you, for Thanks Thank question. the Yes. Oliver.

give where okay, said, are the mean, And QX. we you say So challenges. they just some the the we that were were mean, see we of And stabilize. indeed, seeing quarter. as will flagged I there in you we these in expecting pockets pockets, business, fact, some worsening would to I -- that some were indeed we some last in I during as magnitude, -- discussed that

which also XX% Retail also about Consumer Asia, are -- Australia, we fact, of but our and talking Travel business, Beauty. ANZ China, In is so

And and roughly are of scope we by is indeed, setting terms Asia of your X combination really about. this China, points. impacting Australia Prestige So in Travel Retail so business talking are if the

Consumer Beauty if mind. X impacting really is by side, Beauty really on the points. look to indeed, Consumer have also the we you at need This is in U.S. this what And is which challenges,

So these especially same but good Fragrance. time, really I if season, Prestige, mean, can we good but I replenishment had especially way. holiday areas indeed, low X disruption, mean retailers retailers. the in sellout during are from call indeed, we At in this them I the are so of we the seeing had

indeed very seeing is very, pattern global are on that we cautious So very a And they that managing inventories cautiously. there their inventory are their management.

selling. retailers. if indicating we And I example And this gap on is whole concrete the indeed, is see Fragrance, the being cautious sellout this due take behavior I we as the the where, just are by also mean, single well. the sellout and indeed, seeing high performing sell-out between is very below mid- the we mean healthy. a -- digit. a very to I Fragrance between to But have selling But

Sue Nabi

Sue. this Oliver, And is

both especially happening continue Just to guidance to our given and Laurent's this Fragrances happen another, we what explains moment the this don't our That's what saw the at very divisions. in see hope We season, just complement are rainy will that in replenishment strong prudent and answer. HX. during which see Laurent described, the we sellout or behind we on

Operator

Our Evercore. next from question comes from Ottenstein Rob

Robert Ottenstein

go to you the those U.S. challenges on in seeing You look challenges that I both if and into detail in little structural release. was in cosmetics and the the obviously more forward? wondering on combat could how going bit touched the a it color you competitive you're

Sue Nabi

Yes, this Sue is speaking.

indeed, challenges. So right, structural you're you mentioned some

closures it environment. we at drug in to moment, the the I comes when Some are store the also, of challenges them seeing would are say, specifically pharma

thing is one category Prestige structural. that the healthier indeed a color both not them script, able we -- structural, cosmetics this brands, is only call like the the if just in of makes earnings that this what Indi cosmetics category may are space, earnings brands, I Beauty decline the up today bit which I new sorry, couture and addressed heritage of much combination these referring is it's market. challenges make for are in to these brands because this we believe, of is seeing favored are the but during is Consumer So color call and the I not the brands new the are in where what not and to

strength So market I way, -- the the what the believe still is the think it are brands, I is X this of Heritage doing the any biggest and and the dance, sales. of chunk to takes by

the brands. that U.S., with, brands, thinking a about market, [indiscernible] but that So that trendiness, of thinking together with from remail highly going In also between the U.S. brands, I'm are outside a Heritage course, excitement in give an Indi the elsewhere which cosmetics of the color heritage brands among cetera. the doing kind believe I exposure same specifically exceptional are legacy entering -- of among is benefit about the job. brands, that to X et new new is best

both So it really market. grow takes the to

is our for what if no this that believe If is partner to with market, So is growth. be reason to low not I and our cosmetics discussions -- of color this going single-digit its this traditional to is happen, back the there part retailers.

Operator

from Filippo question Citi. with comes Falorni next Our

Filippo Falorni

growth potentially 'XX. in weakness first out some in talked an fiscal about time, the At of the in coming part You persisting 'XX of 'XX. improvement same fiscal fiscal expecting the of sales you're

So in year of fiscal about that organic and growth enter X%? X% kind to have sales fiscal of 'XX can like you in medium-term levers of outlook to you on as we should your terms accelerate, relative the think you to of 'XX, how kind comment the

Sue Nabi

you Filippo. much, very Thank

by of year the let important way, half, front best me second because element too, I think that is is and So remind everyone half in first ever. this the first, this just an our

was has recall a was company growth if highest division, around the X%, highest the 'XX grown XX% well. potentially the fiscal growth with Consumer the where I which year Prestige, in in and Beauty ever Okay,

this is a it fiscal in to comparative much been has when the high 'XX. really comes explains So way for what us how

In would will classical good inventory normal hopefully, this of forever be that fiscal we a the one or a inventories. 'XX, back because news cannot I they retailers level say, believe to come stay at that more, would levels

crisis was I X.X post the an supply ago. think this years chain following overreaction stocking

So a hopefully, of there stabilization. be kind will

thing, is market by driven Second that's market our a offers.

it's offer-driven Some competitors speak an about all this. speak stimulus, and about market, about we

which big contemplate that remind been I So still and between of Marc the we two blockbuster and double-digit putting the Boss, by Jacobs, industry. and company, Hugo people Coty will #X has to XX% in the the growth become [indiscernible], #X on today the brand year-on-year, is that best which some May by U.S. continuing really for XX% grow Thinking of division the of U.K., fiscal unprecedented. launches. the is border launch launches in very volume the about performing 'XX, has way. market the and of

So it's business. an really offer-driven

half. first in big in a half. second the innovation thing have Same the we So

so brands it We to in half are U.S. example, really some comes very in the to not pillar distribution our brand the also a key Chloe and for our in when were market. results. and, strong gains We some do was playing with a the decided we first brands accelerating Prestige division, with of

So we will expand this.

back of be conjunction emerging of of help Prestige key to together in to fiscal will us but with big also some the other the the expansion in 'XX. launches So markets, our distribution U.S., brands in growth

low such back in hopefully, percentages in are our together This, is mix, are to in heavily Travel as China, moment levels with if control, of they retailer even still anything that inventory Asia these classical now. more in our we right not and are disrupted the Retail single-digit and

Operator

from Our Piper Wolfmeyer next comes question with Korinne Sandler.

Korinne Wolfmeyer

the cost with guidance understand How little some of variable outlook a versus innovation you're takes puts the structure dealing describe on just and for you're how bit to and back I'd the in the deleverage baking reinvestment of you fixed and in the Can with much better. a much little bit like prepared something A&P half? back that? quarter. to things last on are here activation? softer decide you activity pull more to like believe of remarks, I discussed performance? help drive and committed that might half other bit then in to in the volume the you you little promotional And that Or a Is forms margin some also, volume

Laurent Mercier

you. Yes. Thank

of HX that sheet. all, what 'XX are a want So very have very that and healthy we first balance highlight a showing in believe P&L this is in we healthy and I fiscal to

end points, in -- margin result you HX, So the gross mean, basis XX% and gross to of that margin close QX. are really I with, to close I is expansion mean, we which is so XXX

we So disciplined the on the really margin are do a it the it focusing manner. expansion, very in keep doing, we all equation, really shows us managing And gross that work for investment usually strong very we is really course, And fueling because, the a strong of our this this behind very, KPI what's we is really, discipline. then keep which brand. full

looking margin. again So talking ahead, now about gross

which year, strong XXX remember, you in also, was last As we points. very basis around gross had margin expansion mean, HX I

fiscal we remain due it points are base be our margin. will that There to going lower year so high now gross effect, this gross versus 'XX will basis seasonality HX So last rebalance. to margin above a slightly is but XXX

gross margin at year will point about XXX land it improvement. that So our means full basis

stronger the of base from we has also We that I positive year, our it's benefiting described some to the mean, combination have expansion, the continue Now, the sellout. you in starting detail the I support to course, pricing HX, we of we fuel the impact HX, later, continue in can but just carryover really we and Then will as high need the have keep initiatives still sure that from some gross and to still because have margin the from XXs, and mix. we ICP the productivity. Sue HX in effects, HX make in saw this previous in but the

savings -- we confirm this very year. $XXX putting you mean, as I million know, but Then we place are a we in strong initiatives

combination short-term of fueling, it's actions, actions medium year. So which also will the keep long-term but more and mean, for margin next a I

context, EBITDA volatile which this the discipline, to the we also have that manage improvement we that's even that all uncertain showing So are continue than but is really and and more before. in to margin agility

why that's fiscal see to confirm which 'XX, this point So that's and fiscal. will XX really of margin at EBITDA our be that growing to end from margin XX% really means our XX we the that we basis -- EBITDA close

Operator

question Raymond James. comes from next Our Tong Olivia with

Olivia Tong Cheang

do can Prestige versus growth other other with to -- I able respect categories? was hold to to particularly offset why respect mass, in externals? what categories, could about you better help of has Fragrances the been think And if to the talk you you wondering terms with innovation, to on

Sue Nabi

Olivia, question. you thank your for Sue speaking. This is

this growth a indeed, like. very are to key When you're if the is what because you it's of not exactly holding closer interesting buy the market. Prestige the like a So are of I this replaceable. scent. say, question, believe is is not Fragrances they better may because that And scent much element you really easily going the I scent, anything that

categories, close closer. other Cosmetics, that's buy and in find Color you or something whatever, very or if a color for latest I While know, like, to we'll on don't specifically, always primer trying the example, something

also quality years that adding that a for molecules that of of thinking been things the barriers the are of of of Prestige together of really Fragrances the that X, are we've higher longevity So the these X have act fragrance. and because because the creation, uniqueness recently I'm I doing putting science inside juices on bottles, entry creations what know-how. been of by because with crafted about believe the

I So with to to specifically that fragrances say, really resisting are Prestige these fragrances, explain Fragrances cool, better than vibe, other category the would are why or barrier categories. entry a

in the we can what of do Well, the first in terms in is categories to growth? innovation other So part. answer fuel the

of from It has TPM, creating Cosmetics and buying have barriers. the up about a on end that believe where world real the buying same entry it's option. same is up you everyone TPMs kind become fact, innovation. given Color the the I of cheapest In innovation world,

consumers grow but on who if by missing latest we option. able, in that's decided be innovation, to innovation back also and market to high-entry-barrier price the is the market that to to market it reattracting you're this to we that It's the copy fighting putting that on the of that on recently. really worth it's put against to be and will be difficult moment, worth something trend. something course, only able working something that this and in the are are on the And launch put it of that agile cheapest today place it's So buzz to it's

Operator

Our next question Jefferies. with from comes Ashley Helgans

Ashley Helgans

mentioned upcoming you quarter, product kind of last some The introductions.

held Just didn't curious question the following maybe a up of perform on being those fragrance maybe And that bit tell expected. strong off environment as some given in little or industry? for fragrance if you What's you just Olivia's on on underlying then helpful. us the the on be would a about driver. fragrance anything your second can half such embedded quarter-to-date, And then they assumptions

Sue Nabi

Okay.

take the me let part. So part question by

some launches. them. released upcoming mentioned we we quarter, Indeed, last So

the innovations best-selling we at the X biggest agenda. QX. the started, something [indiscernible] the Gucci way, take a effect what biggest of from was This that the we allow really highlights ago. of the that's One key fall we impact in was of retailer this still, in really is to so did one that one which, with than see why didn't of and Flora is that see launch. globally, started we all didn't indeed But which years to not is something us really lesser the benefit of extent a did any Yes, and was U.S. an part QX with of exclusivity Orchid successes a part the high. probably We -- it's

the very we see everywhere, this It's really case. Flora can Now out it's rolled is and doing innovation very, well. that

a specifically which BOSS, the that is has This both launched. the and other scent do is #X BOSS one. number Number Elixir have company explains the key on close and So we with the continuing high innovations on to stellar of are to that's brand we what two, single growth, become the digits.

really we in that is have the this explains done key something launches first two half. So also the that

are growth the these what launches be revealing are half, we launches. without second going are going So category Fragrance assuming we also what to have in to on continue to

by terms will continue of U.K. SKU the 'XX the in of launched and in key these Last DeZwirhas Marc some #X fiscal [indiscernible], which, initiatives. in anniversarying the way, the half innovation Jacobs market. become by second We for we initiatives started year, we Cosmetic the in

X back it the about David will behind very be these we see, I'm So also to innovations see heard but strong key innovation, innovations Gen second the Melton, the Last half not least, year. for prestige as a first script, entry by will will during are represented during universalized. thinking favorite brands. you've time, Charles the earnings of you who which

Operator

comes Next question with Sachs. Goldman Patty from Kanada

Patrice Kanada

I just Retail just in Travel had and general. one on Travel Retail Asia

been a we've pressures with dealing now. for while So there

there. reshape to regions your Retail So and by there? performing or And opportunity? wondering volatility less of to if Asia love related perhaps I resize how outside are talk could maybe more you're would thoughts Travel about there's you opportunities there that, non-Asian toward growth your and rebalancing strategy where

Sue Nabi

is half a significant in this This second market, November also Asia China, the question. and of we've half resources Asian first fact. In the meaning do of is December, this, good to October, Pat, the from Sue. holiday growth but to weeks Travel shifted this to year, to XX% in Retail We started of communicate market, the if but That's some the sell-out the at not and the sell-out, European of our mainly U.S. season. saw reason we to U.S. reaching we do XX%, why prior on but this, even terms specifically

the was to really the Fragrance there growth, resources category specifically these U.S., momentum continues. regions, behind result is this shifting the So from the of where where regions

single say to -- it's the still -- are there. Mist as continuing still categories is and also Body adjacent premiumize such in category Fragrances, of the would the Fragrance and Prestige I the digits, and booming high growing The

So will it's answer of to we've something to continue question. part we that second do, done that your and the

the you regarding is totally first Now Asia part, around Retail, Travel which are right.

it's other really behind I lagging can better Asia, You Asian something is Retail Travel very that which Travel That two regions. that China really these but stream is Asia, on the category Europe Korea that you saw Cosmetics. happened between with of Prestige on behind that say both we tell the stopped well, literally really sales and in which Color It's restrictions sides. key and what regions. a is the are the is in than Americas doing really the regulations is key one between that very, Retail

That was and category. Prestige focused [indiscernible] Color Cosmetics when mainly it comes to our

continuing be Care the than much of Cosmetics. categories, Skin the better are or grow even what the So saw rest Fragrances we on to Color it

category this is difference a it's that competitors a in behind So are versus Cosmetics is, our the lot where think, hurting what I us, it's Care. which Skin really Color region seeing

Operator

comes next Lizzul Anna from of Our America. question with Bank

Anna Lizzul

discuss your the platforms particularly here. just are And proceeds in you Consumer channel wondering like wondering online parts was how how prepared to on you you're then I'm your some in mentioned just I adjusting also this share of the if Amazon you if It versus on could comment seems U.S. remarks, different retailer market shift like channel? and the performing they're Beauty environment. business, can this gaining

Sue Nabi

you Anna. Thank Yes. very much,

So management is offline competition management. why inventory I believe are e-retailers reasons year's really, and it's pressuring online who is their retailers X this indeed, of cash all these probably usually the too, offline totally players, fierce of you're also are right, explaining players through competition players, the really course, that between this why

the other department closures which also it are when So of door also Consumer comes some we seeing but one that explanation a to behind is Beauty. explains in channel behind country, lot direct stores, the and of key bit

market industry. share gaining mention in you're So indeed, to are the They right Amazon. beauty

to of X X, years have very to everyone or remind maybe ago our partnering Klein, with going has to we Amazon this first I brands lot relationship brands us and including BOSS between as seen of some with Amazon. a were that such as special the Amazon. be You've and such created Calvin a players,

The both other growth divisions. element about ask the CB our and e-com on Amazon, I stellar e-com me of can tell performing Prestige you and when indeed, on you is

growing market if gaining stable and that is the the which And market are Prestige is faster thing almost gives say really Cosmetics much omnichannel-wise our a brand health than They wonders we very to in fast and you CoverGirl U.S. a since take CoverGirl, which about the the of U.S. growing Color brands. fast, think brands, U.S. therefore, Amazon, the faster brands. are can like e-com doing share very, is in Consumer I this very on channel. than Beauty same about brick-and-mortar, market say very in if the on of also I possibility good the indicator this CoverGirl the growing on

when of store look you do to lot you looks think in brick equity et consumers of like, online, shirt when brand the Because the you at really the how health a about with your cetera. looks the mortar, is how there while like, and have a brand pure of front the

strategic in are outperform we So for both divisions. continuing and we've to a outperforming that that us, it's channel been

Operator

Our next question comes from Susan Anderson with Canaccord Genuity.

Susan Anderson

out wondering And pricing, guess fiscal fiscal about you're where was for the pricing I land versus 'XX talk expecting 'XX? I now? around higher plans FX maybe given you could if units for to your impact

Laurent Mercier

push was put as indeed, and shared even during that, which to price I increase, the increase in last year. price high some even you mean, okay, moment inflation, mid-single digits we many we a with So at times know, we place year

So ahead, now seeing now slowing we inflation looking down. of are course,

so really have innovations to of all And will Because, increase, we again, all continue of bringing the we power. again, pricing price with are our digits. going be market, innovation. And that's course single power technology -- more low the but to we and what moderate, it's so

monitoring we and continue manner, versus a managing elasticity. also will we in very So precise keep

both volumes. both also by in working So And mix the keep We in against divisions, a the -- that Prestige, that keep it's improving but mass. growing. way, is clear demonstration Fragrance and are We segments not on really on well going on Fragrance pricing keep volumes we control.

are well this we So control really really it of in that shows equation.

Operator

Teixeira Andrea Our next with question from JPMorgan. comes

Shovana Chowdhury

Can the wholesalers to This and versus is sell-out. comment of on I'm Chowdhury levels you Shovana trying just the at retailers. behalf Andrea. inventory decompose sell-in

the seeing -- in more to has improved? trends outlook your And even X like trying you sell-in of if retailers understand Fragrances So quarter the in wouldn't most and also 'XX? February positive flattish or entering for months if still term, please so? Just negative recent near to rather, fiscal or run inventory and exiting you're comment can is on out from

Laurent Mercier

Yes.

indeed, is in And and brick between indeed, again, retailers, at fierce shared, additional some as is we this And adjustments. is wholesalers seeing flagged. So way are still mortar really which creating we also we inventory the there competition and e-commerce, also just and what tension. some a

question again, about category case Now is is in Fragrance, Indeed, this case where mass when good the you this keeps sellout. far seeing, fragrance. were raising and also in are mean, we growing, Fragrance really the the really is Fragrance I by the and Prestige

So category is growing.

We are sellout. growing our

We bringing initiatives. new some are

selling Fragrance. expecting has just indeed, So we what within improvement our this some described. is -- also with And are

So next launches also pockets opportunities. And we of year. big some have

will not the is also Of growth least, have have where the we absolutely, course, And have e-commerce, still engine also upside. markets where some name great in some But last but in plans. also we also promising the upside potential. we there we where some in U.S.,

Operator

comes with Carey question next Wells Chris Our Fargo. from

Christopher Carey

I have X questions.

past So quarters. in adjustments. what the about prepared There this algorithm? thought long-term a forum process remarks think number around few commentary this I is some was for one, your discussion has clearly been in

best-in-class that I of total avoided but the put think you there, about targets out you returns, shareholder prior makes the which clearly, evolution had sense category. you the given have talked

next it week, expectations more more important longer hear feels like shift think recalibrate term. the but for an appropriately to I we could

trying coming accomplish love is a business years the your longer-term to in perspective. the I'd with So what thoughts effectively on

swaps on well. little curious but love and question, question in bit mostly, second is, only add on the a the on on have you the QX? I'll as with second I'm make first prepayment you one, I'd explain which The But can the to what's that going

Sue Nabi

Sue Chris, this is speaking.

So yes, a important this indeed, is question. very

me our let with sharing you So thoughts. start

is the all First, estimated steadier broadly normalizing as to growth, consistent have we this low years assumption that And years we've the a I is market plus market and this growth this beauty was on mid-single-digit level. growth even made several growth But plus with we but the ago. was to the say that what ago if between X%. year, to seen market algorithm it much have X% growing higher, based a is was

before, very is As to goal outperform important. our the beauty very, market. This is

macro in here many, are potentially this there, are disruptions. However, regional level in uncertainties, not happen various decades, tariff environment, there that seen retailer wars honestly now been could that which a many and environment, at has

that we market. committed in no categories. think it our put sales specific in growth of I Whatever we level the our we think like growth therefore, core and to of some markets peers are, is to targets. core longer our specifically the And outperforming prudent and see

drivers our the support So I of we how in have outperformance several this believe do hands. market? we that

a Fragrance world. that usage robust and many increasing penetration structurally the around and First, markets are across still category with still

mass. in is Second, offering company expanding the now its Fragrances to

color skincare. So currently thinking including I'm comes but mass also Cosmetics to our fragrances. to launch we three, leader premium Marc categories Line, the expanding Color Jacobs are and the it we I'm when underindexed. we leading are Fragrances, businesses the are worldwide up about category, global where Cosmetics thinking about Prestige Number are in really of new we

one really XX% brand fastest-growing that this at Coty is that gives is minus care in growing almost occasion China, Lancaster doing on XXX%. It's market brand to the this market me quarter. a the of during at say is indeed wonders skin And

of has market. part SKUs XX of top And some key Chinese the become the

the is our it care skin the comes on to skin of this shoots start really green most moment, but to when difficult biggest comes care. the market market it first when So at the

are and I'm sales. five, faster I'm we'll growth where about our growing continue minutes share year area markets we also and where market, online. four, growing doing when South continue answering an a really is $X is been I'm an threshold will take I'm I've than number we Mexico, Number thinking where to to example ago, by a to the strongly And XX%. the market penetration #X And it about rest about has online billion question comes Hence, the become the reached company we this engine ago grow of business thinking Prestige in about the Fragrance Saudi Africa Arabia. thinking Southeast grow company wonders. maker. the to thinking the our few Asia

of our allow us addition is above to margin. X, market drivers the continue will sorry, to what growth to -- fifth our these clearly, So really growth our remains at sales grow time, this the target same grow and gross the

EPS and allow you cash level XX% our continue grow a us record to free this seen almost would You've quarter precise. this question? Laurent, flow. margin our gross at reaching this swaps XX%, can to be And do to course, of

Laurent Mercier

Yes, absolutely.

the that, either that I at resume some below last return to the I moment, I first first will So mean, all, time mean, indeed, are mean, want years, the of now very Xx. made to swaps, share leverage for as you remind shareholders on noticed, over really I ever clear or we mean, I through dividend. we reaching And we ratio buyback X

swap put on is reserves share a place indeed So to in really mechanism buybacks. we

XX about it's million So shares.

we recent quarters. now price seeing currently is pullback So in that in are as our the some happening mechanics the stock

to current to need give payment according price. the So cash there a true is that banks the mechanism to a stock up -- have to we

way, will buyback. share confirmation anticipation. this operate in really So It's an the the that a also indeed, we is at moment, some

Operator

Astrachan comes Mark question from Our Stifel. with next

Mark Astrachan

the Fragrance, the they especially Prestige was slowdown, coming secondly, that gives just whether So inventory And And talked press confidence you What which levels the the stock pandemic, first perspective? to release, the if to couple out accelerated over fuel I in about elevated on to of in operations levels relative of levels years? historical guess, long-term or evaluating you then Fragrances not retailer on had comment could success. a recent levels. you retailer the back return prior to maybe last for from

on about ago? You're are focus more what X challenged. leverage. an years obviously maybe I in Beauty the terms does reducing versus talking guess a footprint of today business thinking It increasing you bit like Consumer is seem

be about the color the one this of the categories? would portfolio any faster to brands exposure consider helpful. point, as to there consider today being You of business, moving you would more Heritage divesting Just would M&A focus right at sort you talk customers have increase that not

Laurent Mercier

Yes.

we So that Mark year. a little, a last indeed were market. disruptions it's years, is that lot on step I important there we I think the over a have need to transition did retailer explained and stock and we on of, the so think back are levels, X understand what this mean, in to mean, I X, I

the around. retailers crisis. other course, moment, that of indeed the shortage growing And all then were rebuilt with And at they it indeed, seeing are -- some also So way there there some of then COVID. started product inventory. are was we supply And components, that now some

closer be U.S., explained as then stabilized, be Consumer healthy between really think, there the of back difficult it's the connection not sell-out. the Beauty the moment the tell seeing is course, So a are and a be combination which the back will in behavior, to that but getting I long inventory today. of case pocket normal Again, retailers and business again more mean, in how and Asia we going to can the to are we the at that least, will sell-in you to also take, where, we and in assuming I also, disruption

I for you what can that's really tell on the inventory So retailers.

Sue Nabi

is Sue. this Mark, So

evaluating which the operations second success. around the is part to question, fuel On of long-term

put markets, and in we referring agile innovations outperform every right brands. means months. me strategy by less let players, in they first, very Europe, innovations Beauty that in Consumer job you the area, this Again, activating legacy good as are but not specifically by supposed this our only the brands, much by as that very see different continue doing -- place encouraging more and that most having So advocacy very the quickly we it's despite it's some to Color to are are were important more it right powered even to And is our to beauty players. legacy Cosmetics on in a market putting start the Cosmetic saying innovation, in than the U.S., too, X that because

is this side. one So on

see I course, and continue, very in I have the across corporations, we to say, of we time, portfolio and like, are is to channels. markets And evaluating the operating guess, multiple same most always of of our important. the At beauty categories benefit multiple in this multiple

to the closely categories And of are investment very, long-term return each of the We and the different in category, different portfolio where the are brand divisions, two, on very company. by the the and markets. different course, opportunities by looking each presented

while time, So it's continuing in better minds, what are the pivotal be company. could looking really could our both site for what at future options and the that done same be in at the the

Operator

Casella And our JPMorgan. next with comes from question Carla

Carla Casella

in current? maturing that matter? a if you've get go got something couple Or I'm XXXX. And so don't a before of to that's maturity, One, Just you does bonds that X want ahead year of they quick ones. wondering

Laurent Mercier

mean, of so place. with our we we on that in the a I be healthy debt constantly improvement course, that great can Carla, maturity, really this really work and is now deleveraging

are So always option of at. mean, I bond always these looking course, maturities, the are that we

Carla Casella

potential of and then timing the Is sequentially. it? of sale X% update And about us -- give maybe well decline a the business can you state that that Great. any on the or of of Okay. performance

Laurent Mercier

is business the performing well. So

So would methodology work interest the just is rate, accounting by see say, driven the I the to books in which need and or value be used. that you can strongly some,

really performance part standstill of not Then earnings of last second period. So the question, our the of on reminded in we call as November really the reflecting end end was your company. the the that it's is of

So in remain monetize and here, our this asset, of we is mean, asset to I pragmatic which great opportunistic this context course, in a books.

Operator

closing any remarks. and call to to speakers final the would I now turn like back for our

Sue Nabi

very you much. Thank

a both you, in driver of is future, for But price of be earnings by are to key this of even Fragrances, of historically during So continue believe this the whatever to again, will to time, call, thank course, we specifically conclude, the the as the call. this current said everyone, not that and the we continue sales fragrances the satisfied growth earnings same at attending we Beauty the behind Again, trend. now market. category,

improvement happy are last this specifically X years, the of the very with throughout fundamentals We our year.

You've seen which our our our since gross double-digit margin, growth, EPS deleveraging, Xx. lowest X years the EBITDA our growth, Laurent mentioned, and is under just

playing good. are much. of you this we not outperform brands, indicator but continues last very the ultimate we X Sell-out market the Thank of continue our categories least, very in. to health and the be is to And

Operator

ladies you. We And and does Thank wonderful participation. Have conference. your today's conclude that a gentlemen, appreciate day.

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