The fragrance effect was alive and well at Coty in 2024, although its most recent set of earnings showed this was not enough to offset pressures from weak demand in Asia and tight inventory in the U.S. in the latter part of the calendar year, weighing on numbers.
The beauty company continued to double down on fragrance, which has been a key driver of growth. This included securing long-term partnerships with premium brands including Swarovski, Marni and Etro during the year, as well as a license with German television presenter and model Lena Gercke for a mass market scent lineup under the LaGer brand, which debuted in Germany.
At the same time, it launched several fragrances, including a premium line incubated in-house, Infiniment Coty Paris. The collection uses Molecular Aura, Coty’s patent-pending technology, which extends the signature scent of each perfume for up to 30 hours.
It also launched Cosmic Kylie Jenner, the first Kylie Cosmetics fragrance, while Burberry Goddess, released in 2023, remained the company’s biggest launch ever. It was the number-one new women’s female fragrance in the year to June in the U.S., Canada and Germany. Coupled with strong growth in other Burberry franchises, it drove 50% growth in Burberry’s total reported net revenues in the company’s fiscal year to June.
Momentum behind Hugo Boss meant the brand became the number-two men’s fragrance franchise in Europe in the second half, up one spot year-over-year. Marc Jacobs Daisy Wild was the top launch in the U.K. for the calendar year.
In the six months to December, Coty saw growth in both prestige and mass fragrance. But the company noted in its most recent earnings that the mass beauty market had decelerated, and headwinds continued in Asia-Pacific. The divesture of the Lacoste fragrance license, now under Interparfums, weighed slightly on sales.
Consumer beauty, entailing Covergirl, Max Factor, Rimmel and more, saw net revenue drop 8% in the three months ended Dec. 31 on the back of declines in color cosmetics and body care, which were partially offset by growth in mass fragrance.
In prestige skin care, Lancaster saw double-digit sales growth in the last three months of the year, supported by the launch of the Golden Lift line. Philosophy leaned into social media advocacy, and quadrupled its earned media value. Orveda continued to expand, opening La Maison Orveda outposts in New York and Paris.
In the six months to December, sales gained well in EMEA, boosted by the U.K., Ireland, Spain and Portugal, as well as Africa. Revenues in the Americas dropped on a reported basis, impacted by the soft color cosmetics market in the U.S. and lower body care sales in Brazil. An 8% loss in revenues in Asia-Pacific for the period was attributed to ongoing challenging dynamics in China and travel retail, exacerbated by significant inventory reduction.
In February 2024, Gordon von Bretten, chief transformation officer, became a partner at Coty’s majority shareholder JAB and was elevated to the company’s board of directors as of April 1.