Coty beat revenue and profit estimates for the quarter amidst unwavering demand for fragrance and cosmetics even as product prices soared.
The strong demand helped offset the company’s exit from Russia and a strong U.S. dollar, the company said Tuesday.
The company’s earnings report is seemingly a lone bright star at a time when companies across the breadth of the retail landscape are reporting losses and lowering forecasts for next year.
Coty, however, is benefitting from a shift in consumer habits, with many choosing to splurge on smaller luxury purchases such as perfumes and cosmetics instead of making larger purchases.
It is worth noting that the company’s prestige division, which oversees Calvin Klein and Gucci cosmetics and fragrances, saw a 1% decline in revenue. However, CEO Sue Nabi does not anticipate “any slowdown or trading down in the prestige division.”
Nabi added that shoppers are, in fact, trading up from the company’s cheaper labels to ones offered under its prestige division.
Looking ahead, the company plans to further raise its prices by mid-single digits around winter as it continues to tackle higher logistics and labor costs.