Coty raises profit forecast on resilient demand and rising prices
the cosmetics company coty raised its full-year profit forecast on Wednesday, betting on rising prices and resilient demand.
To offset higher freight and labor expenses, along with rising commodity costs, Coty will also roll out further price increases in a very granular fashion across the beauty and “prestige” segments, CFO said, Laurent Mercier, at Reuters.
Coty’s luxury segment, which includes cosmetics and fragrances from Hugo Boss and Gucci brands, saw fiscal second-quarter revenue decline 5% after sales of cosmetics in the division were impacted by social isolation measures in China.
Mercier said on a conference call that China was a headwind in the second fiscal quarter due to sanitary lockdowns, but expected a recovery in the third and fourth quarters after Beijing dropped its lockdown policy.
The executive told Reuters that China represents a great opportunity in the coming quarters, combined with the excellent performance of other regions, adding that the eventual return of Chinese travelers to Europe will create even greater momentum for business on the continent.
Coty now expects adjusted earnings for 2023 of between 35 cents and 36 cents per share, against a previous forecast of 32 cents to 33 cents per share.
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