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Coty to Gain From Kylie Skin International DTC Website Launch

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The growing popularity of digital shopping, especially amid the pandemic-led social distancing, has led companies across various consumer-oriented sectors to strengthen their capacities in this arena. From apparel and shoes to essentials and from electronics to beauty products, players have been bucking up their digital tools to make the most of the elevated online shopping trends. One such cosmetics player progressing on such lines is Coty Inc. (COTY - Free Report) , which has unveiled Kylie Skin’s direct-to-consumer (DTC) flagship website launch in France, Germany, the United Kingdom and Australia.

These global direct-to-consumer websites will help customers easily shop for their favorite products in their native currency and language, alongside exempting several additional customs and duties. Also, this new direct-to-consumer channel will facilitate faster product deliveries to consumers. Notably, the DTC websites will provide a mix of Kylie Skin products at the launch, while the range of offerings will expand in due course of time.

The DTC websites in Europe and Australia will offer products such as Coconut Body Scrub, Vanilla Milk Toner, Walnut Face Scrub, Hydrating Face Mask, Eye Cream, Vitamin C Serum and Foaming Face Wash, to name a few, initially. All products offered are gluten-free, cruelty-free, paraben and sulfate-free, vegan and complementary with all kinds of skin.

Expanding on the existing retailer contracts, this worldwide accessibility is likely to boost Kylie Skin, which is one of the most popular and fast-growing brands on social media. Incidentally, Kylie Jenner is an iconic personality with more than 300 million followers on social media. Introduced in May 2019, Kylie Skin became a top-selling brand in the U.S. skincare space very fast.

Coty Focuses on Making Growth Efforts

Coty and Kylie Jenner unveiled their long-term alliance in January 2020, aimed at further building upon Kylie’s beauty business, which includes Kylie Skin and Kylie Cosmetics. The aforementioned DTC website launch appears to be a prudent move in this regard. Also, Kylie Skin’s international website launch reflects Coty’s focus on solidifying its DTC business model.

Even in the fourth quarter of fiscal 2020, wherein pandemic-led shutdowns largely marred sales, Coty’s e-commerce business was quite impressive. During the quarter, the Zacks Rank #4 (Sell) company’s top and bottom lines deteriorated year over year and fell significantly short of the respective Zacks Consensus Estimate. Results were marred by broad-based channel shutdowns in the fourth quarter.

Nevertheless, the company in its conference call notified that it was witnessing strong momentum as well as market share gains for its e-commerce business. In the Americas segment, the company saw solid e-commerce sell-out for both mass and prestige brands. Even in the EMEA segment, Coty witnessed double to triple-digit e-commerce sell-out growth in its prestige and mass businesses. We believe that Coty’s online strength is likely to get reinforced with the launch of Kylie Skin’s international DTC websites. These should also help the cosmetics biggie tide over the challenges in its path.

Shares of Coty have declined 22.2% in the past three months against the industry’s growth of 11.6%.

Consumer Staple Stocks to Watch Out

e.l.f. Beauty’s (ELF - Free Report) bottom line has outpaced the consensus mark significantly in the trailing four quarters, on average. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Helen of Troy (HELE - Free Report) , with a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 28.3%, on average.

Kimberly-Clark (KMB - Free Report) , which currently carries a Zacks Rank #2, has a trailing four-quarter earnings surprise of 7.4%, on average.

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