Coty Inc Stock

Coty Inc. (Coty) operates as a beauty company with an iconic portfolio of brands across fragrance, color cosmetics, and skin and body care worldwide.

The company continues to make progress on the company’s strategic priorities, including stabilizing and growing the company’s consumer beauty brands through leading innovation and improved execution, accelerating the company’s prestige fragrance brands and ongoing expansion into prestige cosmetics, building a comprehensive skincare portfolio leveraging existing brands, enhancing the company’s e-commerce and direct-to-consumer (‘DTC’) capabilities, expanding the company’s presence in China and travel retail through prestige products and select consumer beauty brands, and establishing Coty as an industry leader in sustainability.

In the year ended June 30, 2023 (fiscal 2023), the company introduced refillable packaging solutions into its global portfolio, including Chloé Rose Naturelle Intense Eau de Parfum and Adidas Active Skin and Mind range of shower gels, which delivered a packaging weight reduction compared to the original baseline body care range. In addition, the company works to reduce the environmental impact of the company’s product formulas and the company’s new products, for example integrating carbon captured alcohol into the company’s fragrances. In fiscal 2023, the company launched Gucci, The Alchemist’s Garden, Where My Heart Beats Eau de Parfum, which was the first globally distributed fragrance manufactured using 100% carbon captured alcohol.

As of June 30, 2023, Coty owned a 25.9% stake in Rainbow JVCO LTD and subsidiaries (together, ‘Wella’ or the ‘Wella Company’).

Segments and Brands

The company operates through Prestige and Consumer Beauty segments.

Consumer Beauty: This segment’s iconic brand portfolio includes Adidas, Beckham, Biocolor, Bozzano, Bourjois, Bruno Banani, CoverGirl, Jovan, Max Factor, Mexx, Monange, Nautica, Paixao, Rimmel, Risque, and Sally Hansen.

Prestige: This segment’s iconic brand portfolio includes Burberry, Calvin Klein, Chloe, Davidoff, Escada, Gucci, Hugo Boss, Jil Sander, Joop!, Kylie Jenner, Lancaster, Marc Jacobs, Miu Miu, Orveda, philosophy, SKKN BY KIM, and Tiffany & Co.

Marketing

The company has a diverse portfolio of brands, some owned and some licensed. The company employs different models to create a distinct image and personality suited to each brand’s equity, distribution, product focus and consumer. For the company’s licensed brands, the company works with licensors to promote brand image. Each of the company’s brands is promoted with logos, packaging and advertising designed to enhance its image and the uniqueness of each brand. The company manages its creative marketing work through a combination of the company’s in-house teams and external agencies that design and produce the sales materials, social media strategies, advertisements and packaging for products in each brand.

The company promotes its brands through various channels to reach and engage beauty consumers, through traditional media, through in-store displays, on digital and social media, and through collaborations, product placements and events. In addition, the company seeks editorial coverage for products and brands in both traditional media and digital and social media to drive influencer amplification and to build brand equity. The company also leverages its relationships with celebrities and on-line influencers to endorse certain of the company’s products. The company’s marketing efforts benefit from cooperative advertising programs with retailers, often in connection with in-store marketing activities designed to engage consumers so that they try, or purchase, the company’s products, including sampling and ‘gift-with-purchase’ programs designed to stimulate product trials.

The company has dedicated marketing and sales forces in most of its significant markets. These teams leverage local insights to strategically promote the company’s brands and product offerings and tailor the company’s creative marketing to fit local tastes and resonate with consumers most effectively.

The company utilizes in-depth brand and market data analytics to develop branding, merchandising and marketing execution strategies to maximize the consumer experience and build a better business. The company continues to concentrate working media resources on select products, channels and markets.

Distribution Channels and Retail Sales

The company markets, sells and distributes its products in approximately 126 countries and territories, with dedicated local sales forces in most of the company’s significant markets. The company has a balanced multi-channel distribution strategy, which complements the company’s product categories. The company’s mass beauty brands are primarily sold through hypermarkets, supermarkets, drug stores and pharmacies, mid-tier department stores, traditional food and drug retailers, and dedicated e-commerce retailers. The prestige products are primarily sold through prestige retailers, including perfumeries, department stores, e-retailers, direct-to-consumer websites and duty-free shops. The company continues to focus on expanding its e-commerce and direct-to-consumer channels. The company also sells its products through third-party distributors. In fiscal 2023, Walmart, the company’s top retailer, accounted for approximately 5% of total Coty net revenues from continuing operations.

Intellectual Property

The company generally owns or licenses the trademark rights in key sales countries in Trademark International Class 3 (covering cosmetics and perfumery) for use in connection with its brands. When the company licenses trademark rights it generally enters into long-term licenses, and the company is generally the exclusive trademark licensee for all Class 3 trademarks as used in connection with its products. The company or its licensors actively protect the trademarks used in its principal products in the U.S. and significant markets worldwide.

Products representing 63% of the company’s fiscal 2023 net revenues from continuing operations are manufactured and marketed under exclusive license agreements granted to the company for use on a worldwide and/or regional basis. As of June 30, 2023, the company maintained 22 brand licenses. In addition, approximately 54% of the company’s fiscal 2023 net revenues from continuing operations were attributable to prestige fragrance, of which approximately 88% was from the company’s top seven prestige fragrance brands.

Government Regulation

Because the company has commercial operations overseas, the company is also subject to the U.S. Foreign Corrupt Practices Act (the ‘FCPA’), as well as other countries’ anti-corruption and anti-bribery regimes, such as the U.K. Bribery Act.

Seasonality

The company’s sales generally increase during the second fiscal quarter (year ended June 2023) as a result of increased demand associated with the winter holiday season. Financial performance, working capital requirements, sales, cash flows and borrowings generally experience variability during the three to six months preceding the holiday season.

Research and Development

The company’s research and development costs totaled $105.2 in fiscal 2023.

History

Coty Inc. was founded in 1904. The company was incorporated in 1995.