In its Financial Results Briefing for FY2023, Japanese multinational personal care company Kosé Corporation reviewed the performance of American subsidiary Tarte Cosmetics and provided anticipated sales growth plans for FY2024.
Tarte, which celebrates its 25th anniversary and a decade since becoming a subsidiary of Kosé Corporation, has seen sales grow fourfold since its acquisition, and “the company has become a major contributor to the Group’s business performance,” said Kazutoshi Kobayashi, President & CEO of Kosé Corporation.
Marketing and brand collection focus
Overall, Kosé Corporation plans to “continue to expand our business in North America, Europe, the Middle East, and Asia, aiming for further sales growth,” said Kobayashi.
This includes continuing to “actively promote the development of new channels” for product promotion, like Tarte Cosmetics’ TikTok store, which “officially opened in September 2023,” and “offers live streaming and user-posted video links to purchase merchandise within the app,” he said. The US Tik Tok store “is expected to continue to grow in sales thanks to its smooth purchase process and enhanced social networking capabilities,” explained Kobayashi.
Regarding the brand’s product collection, in the coming year Kosé Corporation anticipates maintaining Tarte Cosmetics’ “number one market share in the concealer category in North America, while also focusing on lip products, which grew the most in FY2023, and mascara, a staple product,” shared Kobayashi. Lip products “have become Tarte Cosmetics’ second largest category after concealers,” he stated, with mascara becoming a tertiary priority “with the goal of adding more loyal customers.”
Tarte Cosmetics FY2024 sales plan
In 2023, Tarte Cosmetics saw sales growth that was slightly below the 15% increase in US prestige makeup market sales, Kobayashi reported. However, he noted that “Tarte’s growth rate was among the highest of the top 10 brands in this category” last year, and that “Tarte ranked third in the U.S. prestige makeup market and product shipments and store sales rose to all-time highs.”
In 2024, he continued, “although competition is intense due to the emergence of new brands, we believe that Tarte will retain its high ranking.” While Kosé Corporation’s sales plan for FY2024 reflects a 3% decrease, “the plan for a 3% decrease in Tarte’s sales is a yen-denominated plan,” and “we are planning on 4% growth on a local currency basis,” as “the US dollar-yen exchange rate is expected in the direction of yen’s appreciation,” said Kobayashi.
This plan is a result of “the negative effects of high interest rates in 2023, [which] are likely to slow the economy, but the labor market and consumer spending are expected to remain strong,” he reported. Further, Kosé Corporation forecasts “a slow recovery as a recession will be avoided.”
He added that “we believe this is a sound sales plan even though there are concerns about the possibility of a slowdown of U.S. economic growth,” and “the plan for profitability is a goal for preventing a decline from the 2023 level.”
Kobayashi also clarified that at this time, Kosé Corporation foresees no one-time factors that will lower Tarte’s profitability in 2024, as “in the fourth quarter of 2023, maintenance operations at some major sales areas were finished ahead of schedule.”