Stepped-Up Innovation and Marketing to Fuel Coty’s Growth, but Narrow Fragrance Focus a Handicap
We think CEO Sue Nabi has whipped Coty into better shape since taking office in 2020, as the beauty industry veteran sharpens the firm’s focus on innovation and reinvigorates its brand marketing while upholding cost discipline. Top-line growth and margins both rebounded from pandemic troughs as a result. That said, we are not yet convinced that Coty has carved out an economic moat, given its lack of brand strength and tight retailer relationships, in addition to a small revenue base relative to moaty global peers L’Oreal and Estee Lauder.