Sue Nabi, Coty CEO joins the Yahoo Finance Live panel to discuss what it’s like for female CEO's in a business where men run most global beauty brands, despite having a majority of female customers.

Video Transcript

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AKIKO FUJITA: Well, cosmetics companies have taken a big hit over the last year, as mask wearing and stay at home restrictions have led to a weak-- hit to demand for makeup companies. Beauty giant Coty posted a 16% revenue decline in its most recent quarter, as sales in major markets, including North America, as well as Europe, plummeted. Let's bring in the CEO of Coty, Sue Nabi. And we should point out, Sue, that Coty is, of course, the parent company of brands that our viewers are very familiar with-- CoverGirl, Kylie Cosmetics, as well as Max Factor.

There seems to be a lot of optimism right now around the vaccination process. Things are slowly starting to accelerate. You had the CDC just come out a short time ago, saying those who are vaccinated can gather without masks on. To what extent has that optimism trickled down into sales in your products, as you see it?

SUE NABI: Hello, thank you for having me. So, to answer your question, I would say that there was already something that we saw that was shifting in the beauty and the makeup industry, especially in America, which was about what we call clean beauty rising. You know, people are looking for clean alternatives to everything. We've recently launched the LashBlast Clean Mascara in CoverGirl. We launched one year ago Clean Fresh Makeup in CoverGirl. We launched also a new nail varnish called Good. Kind. Pure. in Sally Hansen.

And in fact, the sales of this product not only haven't been stopped by the crisis we're having at the moment, but they have been boosted, in fact. So this gives us confidence that a new generation of makeup products are going to rise ahead-- on top of these, anything that we can call clean, healthy, with skincare ingredients in, which CoverGirl is leading the way, as you can see now, with LashBlast Clean Mascara advertising. That is not only a clean mascara, but that takes care of your lashes, giving you an amazing volume, et cetera.

So, this is what people are looking for. This is what we are giving them. And by the way, you've noticed how this advertising is all about getting outside, getting back to blue skies, fresh air. And this is exactly the direction where we are taking CoverGirl. So, to answer your question, I would say that the good news, the great news about this vaccination rate going so fast, is that people are probably going to run and rebuy their favorite makeup products, including lipstick, which was probably the category that was the most difficult to recover for-- you know, because of the mask wear.

ZACK GUZMAN: Yeah, what's interesting, I think, is to see kind of this bifurcation across-- you can see it in apparel, really, some of those brands that are tethered more towards high fashion or work life versus apparel and athleisure, as people kind of stay at home.

I wonder when you look at kind of the cosmetics portfolio you guys have, if you see kind of a similar bifurcation there for maybe, you know, some types of products that you might see catch a boost. I know a lot of analysts were focusing in on your guys' recent acquisition of Kylie, the Kardashian brand there. Talk to me about that and maybe what you expect for some brands over others once we do return to normal, what strength do you see on the horizon.

SUE NABI: Yeah, what you say is really right. You know, what's happening is that there is a shift towards a new way to buy makeup products, be it from, I would say, mainstream brands such as CoverGirl, or I would say, trendier and more message brands, such as Kylie. And the idea is that we've been taking, in fact-- and this was really my obsession, since day one upon arrival at Coty in September of 2020, was to really concentrate on what is the future of makeup at the different price levels.

I start with CoverGirl or Sally Hansen in the US. I can talk about Kylie, and I can talk, of course, about Gucci makeup, which is doing fabulously well around the world, including in America. So, we've been thinking about what should we put in front of consumers. First lockdowns, first pandemic, hopefully, and this vaccination campaign that's going so fast is really giving us a lot of hope that people are going to make this new era for makeup to happen much quicker than anyone thought with categories such as healthy, longwear, skincare infused foundation. Same thing for the eyes, same thing for the lips.

And by the way, we are launching a new makeup line with Kylie around this next summer. So there is a kind of excitement that we would like to be part of. But we've been doing our homework, which is to take everything back, to think about how can we reformulate. Let's remove anything that was not vegan. Let's remove anything that was not gluten free.

Let's make sure the products we are putting on the markets are all cruelty free, which is the case of Kylie Makeup, which is going to-- which is the case already of CoverGirl makeup. So, the work we've been doing gives us a strong confidence that as soon as people are going to get back without masks, as you have just mentioned it, I think the best is to come.

AKIKO FUJITA: Yeah, I think a lot of people are itching to go out and buy lipstick, right, after a year spent without it. Let's talk about a lot of the discussions that are happening around International Women's Day. You have been a big champion of diversity not just for women, but in terms of age, as well as race, gender. When you look at the industry as a whole, how far along are we, or are you, in getting to where you think it needs to be in terms of representation?

SUE NABI: I think when it comes to the way our brands are expressing themselves towards consumers, we are doing great progress. You know, I've created myself, before joining Coty and after my 20-something years at L'Oréal, I've created a skincare line called Orveda. And I really wanted this skincare line to represent what I consider is the future of beauty, which are products that are vegan, not using plastic ideally, clean formulations, and genderless formulations.

Because a lot of the categories that we are navigating in today, a lot of them can become genderless. I'm thinking about mainly fragrances, skincare. Even products that make your skin look better, such as foundational concealer should be genderless, because these are needs that both men and women are sharing together.

So we've been-- I'm a strong supporter and promoter of this, I would say, trend towards products that are just good to the skin, efficient, without too much, you know, things around being for men or for women or whatever. Because this is not the reality of the product once you put it on your skin, I should say. So this is the way we've been thinking during, again, this moment behind us, and hopefully in the next month, is, how can we adapt the product offer to reflect the diversity of the world.

Our recent launch, even in categories such as fragrances, Perfect by Marc Jacobs has been the biggest launch in America for Coty since 15 years, the number one launch in the US in the middle of a pandemic. And the reason why is that the story behind it is absolutely the opposite of what traditionally or the key fragrance makers are doing, which is to choose women in general, or a man and somebody famous, saying, this is the best fragrance on Earth. And if you use it, you look like me, et cetera. If you look to Perfect by Marc Jacobs campaign, it's 40 people casted online, who showed the diversity of the world we are living in.

So, for me, this launch gives us a direction where to take a lot of our products, showing the diversity of skin tones, genders, ages, looks, body shape, whatever is the name. This is exactly where we want to take most of our brands in the future. Coty is also very forward thinking in this area. When you look at the, I would say, modernity of this brand when it expresses itself, both in advertising and on social media, it's in sync with the world that we are living in.

And this is what we are doing to stretch outside the company with all our brands. When it comes to what's happening inside the company, we are super proud because we have a board of directors that's today a majority, female majority. My executive committee is also a female majority. I'm leading this company. And again, it was something that I was thinking when I was at L'Oreal years ago. When is, one day, a female going to lead an industry that's a female industry mainly? It's there in front of your eyes, and we're very happy about this.

ZACK GUZMAN: No, it's important, and it's important for us to highlight on a day like today on International Women's Day. But one last one for me before we let you go, because you were talking about Coty Beauty just a second ago. And I know you guys recently expanded the presence there in China. Specifically, when you look at maybe the bounce back on the higher end luxury end of not just cosmetics here, but also fashion, what would you say is kind of the expectation there, as the US follows, as Europe follows, and kind of that reopening pathway that we've seen in Asia? What's your expectations? Are you expecting to see a similar match across all markets as we reopen? What's your take?

SUE NABI: Yeah, I think this is what I said at the beginning of our discussion. I profoundly think that beauty is probably one of the most crisis proof categories. But it's been the case in the past. It's still being the case today. And clearly, the success of Gucci we're having in China, we're seeing the same success in the US, where Gucci is sold at Sephora and some other retailers. We've seen the same success in Europe, even if the stores are closed in most of the countries. Because there is a kind of, I wouldn't call it revenge shopping, but people are looking for, at the same time, brands that they admire, desire, but also trust.

And probably the area we've been working on since a few months is to make sure that trust, when it comes through, it's good for my skin, it's good for the society we're living in, it's good for the planet. This is an area where we're progressing super fast on Gucci, but also on other brands such as CoverGirl, Sally Hansen, Burberry, and some other fragrances. We've been doing a fragrance called CK Everyone on Calvin Klein.

That has received the cradle to cradle certification, because everything is super clean, be it in terms of formulations, in terms of ingredients sourcing. This area of I trust you, I think you're doing the right thing. You're putting in my hands the right product that I'm not going to use with a kind of guiltiness, that's changing the landscape.

AKIKO FUJITA: Yeah, it looks like you've got a lot going on there. Certainly some momentum, especially as we see the economies begin to reopen. Sue Nabi from Coty, great to have you on today. Appreciate your time.