Coty raised its 2023 adjusted per-share profit expectations to between 38 cents and 39 cents, from 35 cents to 36 cents earlier. Third-quarter revenue rose 9% to $1.29 billion, topping Refinitiv estimates of $1.22 billion, while adjusted profit of 19 cents per share crushed expectations of 3 cents per share. (Reporting by Ananya Mariam Rajesh and Deborah Sophia in Bengaluru; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty)
(Adds share move in paragraph 2, profit comparison in paragraph
12)
By Ananya Mariam Rajesh and Deborah Mary Sophia
May 9 (Reuters) - Coty Inc raised its annual
profit forecast for the second time and beat quarterly revenue
and earnings estimates, buoyed by the CoverGirl parent's price
hikes and steady demand for its high-end and affordable
cosmetics and fragrances.
Shares of Coty, which is planning for a dual listing in
Paris, climbed about 2% in premarket trading.
The results reflect the recent trend of luxury shoppers
indulging in lipsticks and fragrances even as they shun high-end
purchases amid rising interest rates and product prices.
Coty signaled that retailers were restocking after keeping a
tight leash on inventories in the previous quarters.
"Our retailers are now rebuilding and reordering. At the end
of the third quarter, the level of inventory was very healthy,"
Chief Financial Officer Laurent Mercier told Reuters.
Coty said a post-pandemic recovery in travel retail extended
into the quarter. The segment is an area of focus for luxury
companies where customers snap-up products from duty-free stores
at airports and major shopping districts like Hainan in China.
The company's prestige division, home to cosmetics and
fragrances from the Hugo Boss, Gucci and Burberry brands,
reported a jump of more than 30% in global travel retail sales
across all regions.
In contrast, peer Estee Lauder forecast weaker sales
and profit last week, blaming slow recovery in travel retail,
especially in Asia.
Coty is also seeing sturdy demand from Gen Z consumers, who
are splurging on both luxury brands as well as relatively more
affordable products like Rimmel cosmetics, Mercier said.
The company has been increasing prices of its products to
ease the pressure on margins from sky-high commodity and
shipping costs.
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