Coty Develops New Skincare Strategy
- Chaileedo Press
- Sep 23, 2022
- 2 min read
Skincare portfolio revenue is expected to double by the fiscal year 2025.
At an investor event on September 21, Coty announced a comprehensive update to the company's skincare strategy, which is one of Coty's six strategic growth priorities. Meanwhile, it also announced its financial goals for the fiscal year 2025 and beyond, with revenue from its skincare portfolio expected to double by 2025.
According to previous Coty Group financial reports for the second quarter of the fiscal year 2022 (Oct. 1-Dec. 31, 2021), Coty Group’s revenue grew 11.5% to $1.58 billion in the second quarter, missing expectations of $1.6 billion. The net profit was $192.7 million, a significant improvement over last year's loss of $275.4 million. In terms of the regional market arrangement, its Asia Pacific market reported second-quarter net revenues of $196.2 million, up 16% over the same period. The report mentioned that the growth in the Asia Pacific was driven by strong performance in China and the continued recovery of travel retail.
At the investor event, Coty CEO Sue Y. Nabi said the skincare portfolio has grown into one of the key growth engines for the company's business, building on Coty's years of scientific innovation, leadership, patent, and intellectual property accumulation, and a large and expanding team of skincare experts. Currently, it has now further developed its skincare market in Hainan and mainland China and is gradually strengthening the appeal of its brand, formulation, and communication power to consumers.
In the future, Coty will focus on the company's portfolio of well-known skincare brands, including Lancaster, Orveda, Philosophy, Kylie Skin, and the Kardashian personal brand SKKN by Kim, said Constantin Sklavenitis, Coty's Chief Brand Officer, and the transformation of Coty's skincare portfolio has begun with Lancaster. In the past year, Lancaster has become one of the fastest-growing brands among major retailers in Hainan Province.
Coty believes that all of the above is enough to give it the confidence to capture significant opportunities in the $150 billion global skincare market. By FY2025, it expects to double its skincare portfolio revenue to $500-600 million. Earlier in the first half of 2021, Coty Group had released its long-term strategy, in which the Group's goals for FY2025 included tripling the contribution of its China business to the revenue mix to more than 10%.
With all the key elements of the strategy now prepared, Coty expects to accelerate its growth further in FY26 and beyond. At present, its Prestige and Consumer Beauty business departments, as well as its European, Americas, and global travel retail businesses, are driving the improved perspectives.
In the near term, Coty is raising its FY2023 first quarter LFL sales increase estimate to 8%-9% growth from the previous 6%-8% growth. Adjusted EBITDA (earnings before taxes, interest, depreciation, and amortization) is $955-965 million.
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