(Reuters) -Coty Inc on Thursday forecast a modest revenue growth for the next several years, as it benefits from improving U.S. and China beauty markets and a sales rebound in airport duty-free stores.
The company has been focusing more on high-end fragrances, skincare products, and other categories that picked up pace last year, while makeup products demand waned following the pandemic outbreak that forced people to venture out less.
The majority owner of Kylie Cosmetics brand, founded by TV star Kylie Jenner, has also been trying to revive its CoverGirl, Rimmel and Max Factor brands through new launches, collaborations with models such as Niki Taylor and Adwoa Aboah, and spending more on advertising.
“We expect to outperform the beauty market through FY25 and beyond,” Coty Chief Executive Sue Nabi said.
The company forecast like-for-like net revenue growth of 6% to 8% for each of the next three financial years through 2025, with plans to grow it further in the following years.
Earlier this month, Coty forecast fiscal 2022 like-for-like sales to increase in the low-to-mid teens percentage.
Coty also said doubling down on its online business and higher-end brands would help it approach core earnings of $1 billion in calendar year 2022. Analysts expect $987.5 million, per Refinitiv IBES.
The Hugo Boss fragrance maker said it would divest its remaining 26% stake in professional beauty business Wella by fiscal 2025, having offloaded the rest in several installments since December to simplify its capital structure.
Coty raised its fiscal 2022 adjusted per-share earnings forecast to between 20 cents and 24 cents, versus estimates of 24 cents.
The company, which is on course to save $600 million in costs by fiscal 2023, also said it had identified an additional $75 million of savings for fiscal 2024.
Coty’s shares rose 1% in pre-market trading.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli)
