Puig Brands, S.A. (PUGBY) Q3 FY2025 Earnings Call Transcript & Summary

Good evening and thank you for joining us as we discuss our sales update for the third quarter of the fiscal year 2025 that ended on September 30, 2025. Today, we are joined by our Chairman and CEO, Marc Puig; and our CFO, Joan Albiol. Marc will share some brief remarks, and then we will open up the line for Q&A. You will find this presentation and the press release on our website, and you will also be able to access a replay of this recording on our website after the event.

Good evening, everyone. It is good to speak to you all for our third quarter update for the fiscal year 2025. We are pleased to report that Puig has delivered another strong quarter, demonstrating the consistent execution and resilience of our brand portfolio in a dynamic market. These results reflect our consistent delivery, which we set out to achieve at the start of the year. Let's turn to the details of the update. We have delivered a strong performance for the first 9 months of 2025, which has resulted in net revenue of nearly EUR 3.6 billion. This represents a 7% like-for-like growth and a 4.9% increase on a reported basis, reflecting continued foreign exchange headwinds. This performance is a result of all 3 of our business segments, delivering within or above our full year growth outlook of 6% to 8%. In the third quarter, Puig continued to deliver a steady performance, reaching net revenue of EUR 1.3 billion. This represents a 6.1% like-for-like growth and 3.2% on a reported basis, ahead of the global premium beauty market. These results reflect our disciplined management and the sustained desirability of our brands as we enter the most important trading period of the year even as we lap a very strong Q3 from last year. Let me share some more color on the performance of each of our business segments. The Fragrance and Fashion segment generated net revenue of EUR 2.6 billion in the first 9 months, growing 6.4% on a like-for-like basis. This segment was 73% of Puig net revenue in the period. In Q3, net revenue reached EUR 932 million, up 2.8% like-for-like, which reflects the anticipated moderation in global fragrance markets, particularly as we lap Q3 of 2024, where we grew 11.1% in this category. We continue to drive growth at scale with exciting launches, including the official launch of La Bomba from Carolina Herrera. The Makeup segment, which contributed 16% of Puig net revenue generated EUR 569 million in the first 9 months of the year, an increase of 8.3% like-for-like. In Q3, the segment built upon its momentum from Q2 and delivered exceptionally strong growth, recording revenue of EUR 230 million, a remarkable 18.8% like-for-like increase. This was driven by the sustained success and continued innovation at Charlotte Tilbury, supported by robust retail channel performance and the strategic pipelining into our online partner, Amazon in the U.S. For the Skincare segment, revenue for first 9 months totaled EUR 410 million, a 9.2% like-for-like growth. This represents 11% of Puig's total net revenue. In Q3 2025, the segment delivered EUR 135 million in net revenue, an increase of 10.5% on a like-for-like basis. This was supported by the strong performance of Uriage and Charlotte Tilbury Skincare. From a geographical standpoint, the business grew across all regions on a like-for-like basis. EMEA, which accounts for 53% of our net revenue, reached EUR 1.9 billion in the first 9 months, up 3.9% like-for-like. The region generated revenue of EUR 699 million in the third quarter. This performance was supported by continued strength in Derma and Charlotte Tilbury. The Americas, representing 37% of our net revenue, posted revenue of EUR 1.3 billion in the first 9 months, a strong 7.8% like-for-like growth. In Q3, the region generated EUR 464 million in revenue, which is 2.3% growth in like-for-like terms and minus 2.7% in reported terms. This reflects the anticipated normalization in fragrance and the negative impact from foreign exchange. Further, in this region, Fashion and Fragrance remained healthy in the U.S. However, we saw increased softness in the LatAm markets where we also continue to see competitive dynamics more broadly. APAC continued to outperform with revenue totaling EUR 368 million in the first 9 months, an outstanding 23% like-for-like growth. The region generated EUR 134 million in revenue in Q3 alone, representing a 35.8% like-for-like increase. This performance was supported by successful brand activations and strong momentum from Charlotte Tilbury and a continued expansion of our Niche fragrance business in the region, further helped by the continued benefit from the consolidation of our subsidiaries that we have been seeing this year. APAC now represents 10% of Puig's total net revenue and is the company's fastest-growing region. Let's talk a little about innovation. In Fragrances and Fashion, one key highlight in Q3 was a spectacular fashion show for Carolina in Madrid where we officially launched La Bomba. First indications show a strong sell-out with no cannibalization of Good Girl, and we see potential for this pillar to be a lever of growth for the future. On the Niche side, we launched the reimagined Night Veils collection by Byredo. We also launched a bold new campaign to introduce 50 ml travel and experiment-friendly formats of Potions by Penhaligon's. On the Makeup side, in the last quarter, we introduced additions to the Flawless franchise in the form of Charlotte's Airbrush Flawless Foundation and Matte Setting Spray, reinforcing the Flawless franchise and leadership position of the Airbrush Flawless Finish Powder, both in the U.S. and U.K. markets. We're also excited about our Christmas initiative that we recently launched with a Celine Dion as face of the campaign. In Skincare, we were pleased to see the continued innovation across hero franchises at Uriage and also the new Exoso-metic collection from Dr. Barbara Sturm. We are confident in our pipeline of strong existing pillars and new launches for the upcoming holiday season. We continue to feel encouraged by our consolidated performance across our complementary brands and segments. With most of the year behind us and with visibility from the holiday sell-in, we maintain our full year 2025 outlook of like-for-like revenue growth in the 6% to 8% range. We have had a solid start to Q4. And with that, we now expect growth for 2025 to be in the middle of this range, an improvement versus our expectations in September. Further, we are confident in our expectations for adjusted EBITDA margin expansion in line with the improvement we delivered in 2024. We approach the holiday period, which is very important for us, with confidence in achieving our full year outlook. Further, we are excited to share that we plan to organize a capital market day on April 16 and 17, 2026. In 2021, we presented the last vision plan up to 2025. With this year ending, we are now in the process of defining the next such plan. During the Capital Markets Day, we plan to share this vision with you.

Thanks, Marc. With that, we come to the end of our prepared remarks, and we will begin Q&A.

The next question comes from Patrick Folan from Barclays. Please go ahead.

Just a couple of questions for me. Can you maybe help us understand how much of a benefit the Charlotte Tilbury sell-in on Amazon was for the Americas like-for-like in the period? And should we expect any further benefit for Q4? And can you give us a sense of the growth rate or the exit rate in the Q3 period? You commented that you seem to have greater visibility for the holiday period now, and it looks to be going reasonably well. And then I guess my second question is that you kind of said you're seeing better performance now than you did in September. Can you just maybe explain what is different now because it does seem like fragrance is still moderating, but you've had good sell-in with Charlotte Tilbury? So just maybe trying to square those two points. Thank you.

Thank you, Patrick. First regarding your first question, the improvement or the growth that we had in the third quarter for the makeup category, Amazon represents about half of that 18.8% growth that we saw during the period, and we still expect some benefit in the fourth quarter coming from that expansion in distribution. Regarding the -- why we have improved our guideline for the year, in early September when we last spoke with you, we had seen a soft July and August. The current trading at that time was soft, and we said that the Christmas season is a very important part of the year, particularly for the fragrance category. And we -- since still 90% of our business is done through wholesale, and we wanted to see the open-to-buy from the retailers. September and October have gone high, and the mood we've seen in the open-to-buy has been healthy. We see healthy expectations for the Christmas campaign, and that's why we are now ratifying our expectations for the year to be in the middle of the range and no longer on the low side of the range that we set in September. I hope that answers your questions.

Thank you. And just can I follow up quickly? Should we expect a similar level of benefit from Amazon than in Q4 for Charlotte Tilbury and Makeup?

Not at the same level of impact that we saw in Q3.

The next question comes from Mariano Szachtman from Santander.

Can you please comment on the evolution of Charlotte Tilbury initiatives? We're seeing very strong growth. So trying to understand if this is what coming from innovation or -- and if demand is picking up for the brand, and also what could we expect in terms of geographical expansion? We've seen a very strong figure in Asia. That's my first question. And my second question is on fragrances. Could you comment on the performance of Niche versus premium within the category? I mean in the past, the Niche was growing double digits. So any color you could provide on Niche or the performance in particular of Byredo would be helpful.

Thank you, Mariano. Regarding Charlotte Tilbury, remember that this is a brand that is relatively young and still, in terms of distribution, has a much smaller distribution than many of the competitors we compare to. And we've seen, in the past few months, impact from geographical presence and initiatives we have taken in Asia and in the U.S., with Charlotte visiting some of the markets in the last few months. We're seeing also the campaign that Celine Dion has done for Christmas that's starting to pay off in the demand that we're seeing for the brand as well as the innovation that we have mentioned in our prepared remarks. So overall, there is an opportunity for this brand to expand geographically still and expand distribution, but we want to do that carefully step by step. And that's one of the reasons, for instance, when we decided to open with Amazon, as a channel that in the U.S. has proven to be a very important new entrant, let's say, in the beauty territory. Regarding your second question, it's been now nearly more than 10 years that we see that the niche category is the segment of the fragrance market that continues to grow faster than the overall category. In our case, we're seeing the Niche year-to-date growth for our brands at double digit and continues to bring growth for the category and Byredo being, in our case, the engine of growth among the different brands that we have there. Yes. So I think that answers the question.

The next question comes from Aron Adamski from Goldman Sachs.

I have two on fragrances. First, on your blockbuster launch. Can you please give us some color on how much of the growth came from the initial pipelining of La Bomba? And could you also please share what has been the initial retailer feedback on this launch so far? And maybe how are the replenishment orders looking like in October? And second, a bigger picture on inventories. I mean you called it out, and we have clearly seen the category growth moderate in recent months. Can you please give us your assessment of the latest category growth? And given this moderation of trends, what is your view on the current retailer inventories? Are you seeing your customers being more cautious on stock levels? And would you expect to see some retailer stock adjustments next year if the category is not growing as fast as it used to in recent years?

Thank you, Aron. The La Bomba launch has been still relatively limited in terms of geographical presence and because we started -- we launched it in the travel retail channel, and then we have expanded it in some European countries. And -- but we're not launching it in the U.S. We have not launched in other places. So for us, La Bomba this year will have a limited impact. The important thing is to see whether the reaction from consumers has been strong in terms of the first impulse to buy. And we will see whether there is a repeat business 6 months from now when they finish the different bottles. So it's -- to us, to declare, let's say, a launch a significant success and a new pillar, as we call these new launches, let's say, it takes more time than a few months. What we can say is that the first indications are promising that we are not seeing cannibalization with the last -- the other big pillar, feminine pillar for Carolina Herrera, which is Good Girl because the fragrances are very different territories, let's say. And that is what gives us hopes and make us feel confident that we have started or we have a good start of this project, and it's promising going forward in the future. But still, it's a small percentage of our sales, and we will not be able to see whether that's a big contributor for growth until a few months from now. Regarding the inventory stock that the retailers have, we will -- as I said, we see retailers have good sense of whether the Christmas campaign as it comes -- has a good trend. What we are seeing so far is that the open-to-buy from retailers is healthy. And we will not know whether -- and so far, we don't see problems in terms of challenges in terms of stock at the retail level. The question will be early next year, after the Christmas campaign is over, whether the consumer has bought into the category or not. We have been seeing moderation in the category over the past few months. But as I said before, we see good vibes from the retailers at this point, and that was what gave us confidence about our guidance. 10 months are already in, and there's only a small percentage of the year, and that's why we now gave that improvement in our guidance, let's say.

The next question comes from Joffrey Bellicha Meller from BofA Securities.

My first question relates to the Charlotte Tilbury launch in Mexico. I know you quantified the contribution of Amazon U.S. in the third quarter to the Makeup growth. I was just wondering if you could quantify the impact of Mexico's launch in the third quarter as well, please? And the second question I have is regarding your guidance towards the end of the year. I was wondering if that meant that fragrance should also fall between the 6% to 8% range for the end of the year and which would obviously imply some form of a reacceleration probably for the category at the end of the year. And I guess the third question I have also is you made obviously some pretty positive comments on the open-to-buy of the retailers. Is that a comment that's specific to fragrances? Or is that a comment that you would attribute to other categories?

Yes, Joffrey. First, regarding the Charlotte Tilbury in Mexico, when -- the way Charlotte Tilbury has entered different markets has always been through exclusive arrangements with a few retailers. So in Mexico, we opened with only a few doors in [ Palacio de Hierro ] and with only a few doors with Sephora. So the impact on this launch, let's say, is still very small. But the reason we do this with this brand is because we want to create the demand, and we want to create the scarcity, and we want to make sure that wherever we are, we have the best location and we make a lot of noise. So the impact on the brand in that market will take some time to be meaningful for the overall business. So as I said, low impact for the third quarter of Charlotte Tilbury or Makeup in Mexico. Second, regarding the guidance for end of the year, what we -- when we say is we've seen moderation of growth in the fragrance category, we see that the second half, our projections is for a low single-digit growth, and we believe we'll do better than that. So that's our projection. And third, regarding the -- whether the open-to-buy from retailers is specific to fragrance, the Christmas season is a very important part of the year, particularly for fragrance, more than for makeup and even more than skincare because it's a gifting impulse category. So that's why most of the open-to-buy comments that we've made regarding the response from retailer does affect, let's say, fragrance. It's 77% of our business and fragrance for Christmas is the biggest category. So that's why most of the comments come for that category.

The next question comes from Jeff Stent from BNP Paribas.

Just one question, if I may. What do you estimate sell-out was across your business in Q3? If you could give us any color on that, that would be great.

Thank you, Jeff. That was -- that's a tough question because it's the sell-out by category, by -- it's -- we monitor sell-out by category and by brand, which is not what we disclose. And we don't have yet the sell-out information. It takes a little bit more time to gather the different information by market because some of them are very sophisticated, and we have weekly sell-out information. In other markets, we only get monthly. And in our cases, only every 6 months. So we don't have yet more precise sell-out information. We have the perception from the different mechanism we have to gather that information. And the sensation we have is positive. That's why we also decided to upgrade our projections for the year or our guidance for the year-end. Yes. Not very specific, Jeff, but that's the best I could do.

The next question comes from Tom Randall from Jefferies.

Well, I just got the one. Asia Pacific was a very strong quarter. So I just wanted to know if you can get some more color on what's driving the performance there. We're seeing a pickup in travel retail in the region. And is there an acceleration of your presence kind of in the channel? And then also just a follow-up on that, are there any one-offs that we should be aware of in the region?

Yes. Thank you, Tom. There are several -- I mean, first of all, remember that APAC represents for our company, 10% of our business, which is one of the lowest penetrations of -- in the industry. And growth comes from different vectors. Number one, because we have had an important impulse in the Charlotte Tilbury in several markets in terms of initiatives we have taken for brand efforts, we have seen growth in the Niche category in the different markets where we have the Niche brands. We have also a positive impact due to some of the subsidiaries that we have opened in the past few years. We have gone from distributors in some of the markets to subsidiaries. So after a certain transition period that may have a negative impact, we're seeing now the benefit of that move. And overall, that's why we are seeing a significant growth in the area, which we believe will continue because we still have low penetration in that area. In terms of travel retail, in our case, travel retail worldwide is less than 10% of our sales and particularly in APAC, not necessarily very strong since it's in that geography, the -- it's skincare and makeup are the biggest categories. And we have not seen necessarily a big impulse in travel retail in the area other than the normal evolution. I hope that answers your question.

The next question comes from Fernando Abril-Martorell from Alantra.

Fernando, can you check if you are on mute? We go to the next question.

The next question comes from Celine Pannuti from JPM.

My first question is on Americas, which was 2.3%. So I understand there was this impact from Amazon. So ex Amazon, I think it was slightly negative. Can you talk us through the moving parts, I presume between LatAm and North America and fragrance versus makeup? And maybe a second question, but as a follow-up on that. Last year, you had in Q4, the impact from Argentinian peso that was a contribution. Given it has been quite a volatile currency, can you say what is the impact of the peso as much as you can say from now if the spot prevails, what we should expect for the fourth quarter? And then my second question, Europe has accelerated, and I wanted to understand -- sorry, it's not accelerated. It's 4%, slight acceleration, but it's quite robust. I wanted to understand whether -- what drove that? If you could give us a bit of an idea of what the fragrance versus makeup performance was there?

Thank you, Celine. First question regarding the Americas. We have seen in LatAm over the past few years, a territory where we have historically hold a very strong first position in terms of fragrance category. We have seen -- and I mentioned that in prior calls, we have seen the emphasis and focus from some of our competitors that send, let's say, or put resources out of APAC and into other territories and LatAm has been one of them. And we have seen a significant competitive environment, and we have been reluctant to fall into some of these dynamics, and that has affected a little bit our business. So that's an area where we still hold a very strong position. Our brands are top ranking in the area, and we're seeing how to respond to some of these dynamics. Regarding the Argentina peso, maybe Joan, you want to give some color there, and then I'll answer the third question.

Good evening, Celine. I think last year, we had in Q4 a positive impact for Argentinian peso of EUR 11 million. I think this year, you know that for hyperinflation accounting, we have to wait until the last moment of the year, but we are considering a partially negative impact, but at lower level than the one we have last year.

And in terms of Europe, you mentioned quite robust performance, mostly is due to Charlotte Tilbury and derma strength in the area that has imposed the overall business for us. I hope Celine, that was...

Can I just follow up on my first question on the Americas. So if I understand, Latin America was under pressure. Was fragrance U.S. positive? And also Charlotte Tilbury, I mean, clearly, you are getting the benefit of Amazon sell-in and you mentioned that it will be less in Q4. Last time, I think 2 years ago, you had the benefit of Ulta sell-in and then we had seen some quarters where the growth had been slower. I just want to understand whether there would be -- like when do you expect maybe that we have a bit of a normalization of that sell-in?

I think related to fragrance in U.S. was positive. And related to Charlotte Tilbury, as Marc explained, out of the 18.8% increase in Q3 of Makeup, half was Amazon, but the rest has been organic and we have had a positive trend. And we think that this positive trend will continue in the case of Charlotte.

The next question comes from José Rito from CaixaBank.

I have a question on Charlotte Tilbury. So in terms of pipelines of new countries, retailers, we are seeing the positive impact from adding either new countries such as Mexico or the retailers such as Amazon. So anything new over the coming quarters expected? And also related to this, second question is why aren't Puig moving faster in expanding Charlotte Tilbury? I mean we are seeing the very strong results of adding new countries or new retailers. So why not moving faster? Is this because of marketing budget constraints? Is because it's dilutive? Just to understand why. And then my third question on the market share evolution in fragrances. There were some deterioration, I remember, I think, in the first half. It seems that now you are getting again market share in fragrances in the second half of the year. Could you update on this?

José, sorry, I didn't get the last question. Can you -- because we have some -- that sounded a little bit intermittent. Do you mind repeating the question?

Yes. It was on the market share evolution in fragrances, if you can update on this because in the first half, I think it was a deterioration on the market share evolution, slightly decline. If you can update. It seems that you are gaining again market share in the second half for fragrances.

Okay. First question, Charlotte Tilbury pipeline, whether we have opportunities going forward in opening new markets and new territories. And the answer is yes. As an example, there are many markets where we still have an exclusive retailer because we have made a commitment to have 2 or 3 years of exclusivity. So there is an expansion opportunity in other doors. We have other markets where we have not entered. The case of example is LatAm. We have a very strong position as an organization, and we have only opened Mexico and with few doors, as we mentioned. And there are even strong large European markets where we still have very low penetration. So the answer is yes, there are opportunities for growth that are obvious. And then your second question is a natural question, why don't you move faster? The reason is because the formula has been very successful, and we are careful at making sure that this is -- that what we do is sustainable over time. Look at the position of Charlotte Tilbury in the U.K., where it's a #1 brand. That's the market where we have been the longest. And we still are not present in a very significant retail operator that has most, if not all, of our competitors, and we're not yet even present. So there is opportunities to keep expanding the brand. I think we believe it's important to maintain the desire and this scarcity and this willingness from operators, from retailers to have the brand and that gives us the leverage to select the position and the space. And that's a formula that has proven to work, and we want to make sure that we protect that over time. But could we move faster? The answer is yes. Third question regarding market share. In the Q2, we had -- we mentioned the market share that we have...

10.9%.

10.9%. When you look at our evolution over time, and I go back a little bit in time. 20 years ago, we had 3% market share in fragrances, in Prestige fragrances worldwide. We chose to focus on this category. We believe we have structural advantages that make us able to continue gaining market share. But when you look at the last 20 years, not necessarily, we have won market share every quarter of every year. And this is a category that is very much linked to innovation to successful launches. And sometimes we don't necessarily make all the launches successful. But over -- we are confident that we have the ingredients to be able to keep winning in the long term. And we normally in the -- when we look at the year as a whole, we normally win positions during Christmas. So we hope that this Christmas, we will continue being able to capture market share as we have been doing for many of the past years. I guess that answers your question, José?

Yes.

The next question comes from Fernando Abril-Martorell from Alantra.

Can you hear me now? Sorry before I had some connection issues. I'm sorry if I repeat some questions. I've missed a couple. First, was there any impact from Argentina's devaluation in your Q3 performance in fragrance? And second, based on your better outlook for Q4, should we expect a reacceleration growth for this segment in the last quarter?

Segment, meaning fragrance. I understand.

Yes.

Thank you, Fernando. Regarding whether there is any impact on the Q3 for the devaluation of Argentina peso, the answer is no. And that's easy to answer and quick. And what we expect for the fragrance category for the fourth quarter, what we said before is that we are seeing or we're projecting for the second half, low single-digit growth for the category as a whole in the market, and we are projecting growing faster than that. So that's why, among other things, we are improving our overall guidance for the year. Yes.

The next question comes from Luis Colaco from JB Capital.

Just one question on the like-for-likes of Makeup. You said that there was a big contribution from Amazon. I think 50% of the growth was coming from the contribution from Amazon. Even knowing that in the fourth quarter, you won't have the same type of contribution, the comparable figure for the fourth quarter seems to be softer. So can we expect the same type of like-for-like growth in the fourth quarter for Makeup?

Thank you, Luis. The answer is no. It's true that last year, we had an impact for the setting spray that was impacted negatively to the category. For the fourth quarter, we will not have that impact. And so we expect a healthy like-for-like growth, but not as much as we have seen in the third quarter.

That was our last question. Thank you all for your questions today. We will be presenting our full set of full year 2025 results during the week of February 16, 2026. We look forward to speaking again with you then. Thank you very much.