US-based beauty retailer Coty has registered a sales growth of 15% to $1.18bn in the third quarter (Q3) of the fiscal year 2022 (FY22) on a reported basis.
In the three months to 31 March, the company’s sales grew by 19% on a like-for-like (LFL) basis, driven by growth in its Prestige and Consumer Beauty segments.
Coty’s gross margin for the quarter rose by 64.3% compared with 61.9% in Q3 2021, while its adjusted gross margin was 64.6%, up from 62.2% a year earlier.
The company’s operating income was $57.1m on a reported basis, against a reported operating loss of $1.4m in the corresponding period of FY21.
Driven by an increased operating income, Coty’s net income improved to $49.6m from a net loss of $1.2m in the previous year.
The retailer’s earnings per share (EPS) were $0.06, against $0.00 in Q3 2021.
Coty CEO Sue Nabi said: “I am extremely proud of the organisation for delivering these results, and outperforming the overall beauty market, in an increasingly volatile environment.
“This confirms that Coty has the brands and the people to win in the beauty market, guided by our strategic priorities of delivering above-market sales growth and expanding gross margin, allowing for brand reinvestment, profit expansion and continued deleveraging.
“Our market-leading Q3 LFL sales growth in both Prestige and Consumer Beauty confirm that our decision to step up media investment during Q2 has proven to be the right one.
“I am also pleased to say that Q3 marks another quarter of improvement on debt reduction and free cash flow, with our leverage now at 4.7x and well on track to drive our leverage towards 4x by end of FY22.”
Following its Q3 performance, Coty expects its FY22 LFL sales to be at the upper end of the low-to-mid teens.
The company has forecast adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $900m for the year.