Coty Inc. Class A

Good morning and good afternoon, everyone. My name is Todd, and I'll be your conference operator today. At this time, I would like to welcome everyone to CODI's first quarter fiscal 2024 question and answer conference call. As a reminder, this conference call is being recorded today, November 8, 2023, at 7.30 a.m. Eastern Time or 1.30 p.m. Central European Time. Please note that on November 7th at approximately 4.30 p.m. Eastern Time or 10.30 p.m. Central European Time, Cody issued a press release and prepared remarks webcast, which can be found on his investor relations website. On today's call are Sue Nobby, Chief Executive Officer, and Lawrence Mercier, Chief Financial Officer. I would like to remind you that many of the comments today may contain forward-looking statements. Please refer to Cody's earnings release and reports filed with the SEC where the company lists factors that could cause actual results to differ materially from these forward-looking statements. In addition, except where noted, the discussion of Cody's financial results and Cody's expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the company's release. With that, we will now open the line for questions. If you would like to ask a question today, please press star 1 on your telephone keypad. You may remove yourself at any time by pressing star 2. Once again, that is star and 1 to ask a question. Our first question will come from Nick Motey with RBC Capital Markets. Please go ahead. Your line is open.

Thank you. Good morning and good afternoon, everyone. I actually had a bigger picture question. You know, Sue, when we recently met in person a few weeks ago, you were very excited about the innovation program at Cody. And I wanted to ask a more broader question about skincare and how you think about skincare holistically in the sense that, you know, topicals is one thing, but what about ingestibles and injectables? And I'm just curious on philosophically how you think about the category going forward.

Okay. Hi, Nick. Thank you for your question. Indeed, that's, as you say, the bigger and the broader picture. I think what we have shared with all you guys several times is that the skincare market, and by the way, the beauty market, generally speaking, is going in the direction of the, you know, medicated beauty. This is something that we see very, very strongly. That's the reason why we have decided to reposition some of our brands quite strongly on this area. If you allow me, may I remind everyone that we just did the launch behind Orveda Skincare of the first serum that uses technologies inspired by the medical world that we call senolytics, which is the first time a skincare brand is using this kind of technology in a topical cream, as you say it. On Lancaster, the story that is really resonating very well is the story of using these vectors, liposomes, that penetrate deep inside the skin, and this is really what is making the brand resonate with the Chinese consumers. and also on philosophy in the U.S., we've decided that the brand will stand for the brand that's going to bring a bit of wisdom in the craze around dermatologic ingredients. So as you hear it from my words, it's all about a kind of medicated beauty. In the beauty world, we are using ingredients and formulations that are acting on the upper layer of the skin and we are not allowed to go lower. So if you think about injectables, You clearly see this booming with other companies selling products that are going to release the muscles without coating any brand, products that are all about injecting hyaluronic acid inside the skin, vitamins, or sometimes medical devices allowing a faster penetration of the active. So you're right, this is the direction that the overall market is going into, but we have some limitations when it comes to selling skincare from a beauty brand that does not require any kind of long-time testing like a medication or a drug would require. But that's more or less the direction we are seeing. Ingestibles I mean, ingestibles is like male skincare. It has been a kind of, you know, everyone says this is the year of ingestibles and the year after nothing has happened. So again, there my gut feeling is that this category needs a bit of strong R&D because a lot of people believe that what you are going to ingest is going to be digested by your stomach enzymes. And at the end of the day, what's the difference between eating good food and having ingestibles? So that's also something we hear from consumers, that ingestibles need to demonstrate their ability to bring to the right place the right ingredient, knowing that they come into your digestive system. So that's the big picture I could share with you. I hope I'm answering part of your question.