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Coty (COTY) Teams Up With Perfect Corp. to Accelerate Growth

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Coty, Inc. (COTY - Free Report) is focused on enhancing e-commerce experiences for its customers. Moving along these lines, the company entered into a multi-channel agreement with Perfect Corp. — a well-known beauty tech solutions provider. The partnership will bring top-notch augmented reality and artificial intelligence experiences to the digital marketing toolkits of Coty’s beauty brands. Perfect Corp. will provide various solutions that include online skin diagnostics and virtual try-ons. The deal will also help Coty achieve data-driven personalization for brands like CoverGirl, Sally Hansen and philosophy as well as its fragrance category.

Apart from such digital experiences, the move will enhance customers’ in-store shopping with touchless product experiences. Such experiences bode well amid a rising need for hygiene and safety mandates in the retail industry. The partnership is also aimed at the development of a roadmap for co-creation of exclusive technologies for the company’s brands.

Certainly, the partnership will help Coty’s customers to shop in the most convenient and personalized manner both online and offline. The deal with Perfect Corp. further accelerates Coty’s "Digital-First Omnichannel" strategy, focused around digital storytelling and discovery. The company is on track to strengthen its e-commerce and direct-to-consumer capabilities with focus on digital first omni-channel. Management is shifting its strategy toward digital storytelling and discovery to boost product sales both in store and online.

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Coty’s e-commerce penetration reached high-teens percentage in fiscal 2021, double the penetration compared with pre-pandemic levels. During the fiscal fourth quarter, e-commerce sales in the Americas surged 36%, despite tough year-over-year comparisons. E-commerce sales in EMEA rallied 20%. The metric jumped at a triple-digit rate across Asia-Pacific.

Focus on Strategic Partnerships

Coty, which shares space with Inter Parfums, Inc. (IPAR - Free Report) , has made several strategic partnerships to enhance its brand portfolio. On Mar 3, 2021, the company signed a letter of intent to partner with LanzaTech — a pioneer in producing next-generation green and sustainable ingredients. This partnership is aimed toward the introduction of sustainable ethanol produced from captured-carbon emissions into Coty’s fragrance offerings

Coty and Kylie Jenner unveiled their long-term alliance in January 2020, aimed at building upon Kylie’s beauty business that includes Kylie Skin and Kylie Cosmetics. It relaunched Kylie Cosmetics, formulated using clean and vegan ingredients with a revamped packaging. The Kylie Cosmetics line and the new-integrated website were rolled out on Jul 15, 2021. The company is impressed with the brand’s performance.

Shares of this Zacks Rank #3 (Hold) company have increased 15.4% so far this year compared with the industry’s growth of 14.3%.

Top 2 Cosmetics Picks

Helen of Troy Limited (HELE - Free Report) , currently carrying a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 28.2%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Nu Skin Enterprises, Inc. (NUS - Free Report) , currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 15.7%, on average.

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