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Coty boosts core sales forecast as price hikes, strong beauty demand help
Views: 1878
2023-09-20 19:57
Coty on Wednesday raised its annual core sales forecast on the back of higher pricing and strong demand

Coty on Wednesday raised its annual core sales forecast on the back of higher pricing and strong demand as customers splurge on its high-end and affordable cosmetics and fragrances.

The CoverGirl parent's shares were up 6% in premarket trading.

Even though inflation has dented sales of higher-margin goods, the beauty industry has seen a boost from people prioritizing spending on smaller luxuries like makeup and perfume, keeping the post-pandemic rebound alive.

The company said since it reported earnings in August it has seen a strong momentum in beauty demand, particularly in prestige fragrances - its high-end segment that houses cosmetics and fragrances from the Hugo Boss, Gucci and Burberry brands.

Coty now expects fiscal 2024 core like-for-like (LFL) sales growth between 8% and 10%, up from its earlier outlook of LFL growth being at the top end of its target range of 6% to 8%.

However, in August, the company forecast annual profit below Wall Street estimates, on a likely hit from steeper input expenses in the first half of the year and said it would raise product prices as it battles higher costs and a strong dollar.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shailesh Kuber)