Coty is not feeling the slowdown in beauty sales. On Wednesday, the beauty conglomerate, which owns the likes of Gucci Beauty and Kylie Cosmetics, reported a 2% growth in net revenue for the first quarter of fiscal year 2025.
“One thing is very clear: Consumers continue to prioritize beauty in their spending routines, even as they pull back on many other consumer segments,” said Coty CEO Sue Nabi.
Fragrance was the standout growth driver for Coty, particularly in the prestige category, which grew 6% in reported revenue. Designer fragrance pillars proved to be outperformers for the company. Like-for-like sales for Burberry Goddess and Goddess Intense grew 17% in Q1. Coty also reported that Marc Jacobs Daisy Wild, launched at the beginning of the year, is now in the top three female fragrances for the U.K. and Germany. The company reported that, while it is a comparatively small portion of the Coty portfolio, the ultra-premium fragrance category saw a 17% growth in like-for-like sales. Nabi said the company will also emphasize the mass fragrance category in the year to come.
Runaway growth is no longer a given in the beauty market. Estée Lauder recently reported a 4% decline in net sales for Q1 2025, while Ulta Beauty reported a 1.2% decline for the second quarter of 2024. Like Estée Lauder, Coty suffered from declining travel retail sales in Asia, where it reported a 5% decline in net revenue for the region in Q1.
“For us, as for many other beauty players who were outperforming, this year is poised to be a transition year as the normalizing growth is exacerbated by pockets of disruption in several markets,” said Nabi. Nabi added that Coty anticipates the global beauty market will continue to grow, nonetheless, by 3-4% in the year to come.
Though Asia sales faltered, the company reported strong growth in the rest of the globe. In EMEA, Coty reported an 8% growth in net revenue. In growth engine markets, which include the likes of Brazil and Mexico, Coty reported a 15% growth in like-for-like sales.
Looking ahead to 2025, Coty said it will emphasize AI capabilities to increase its speed to market and align regional growth. On Monday, the company also published its 2024 sustainability report, where it reported a 65% reduction in air freight emissions compared to 2019 and that it achieved gender balance in its leadership, ahead of its 2025 goals.
