May 9 Reuters Coty Inc raised its fullyear profit forecast on Monday following resilient demand for its highend fragrances and skincare products in the United States and Europe at a time when inflation has soared to multiyear highs in most countries.

Demand for luxury goods has held up as higher prices of everyday essentials have not affected the spending power of the affluent, updates from cosmetics group L39;Oreal and Birkin bag maker Hermes have shown in recent days.

Revenue at Coty39;s prestige division, which houses cosmetics and fragrances from the Hugo Boss, Gucci and Burberry brands, rose 21 to 726.4 million for the third quarter ended March 31.

Coty39;s prestige brands are seeing phenomenal growth, which means that consumer confidence to buy our brands is intact, Chief Executive Officer Sue Nabi told Reuters.

Customers unable to afford products from its prestige segment could trade down to the consumer beauty unit that sells lowerpriced items, Nabi said.

However, Coty39;s shares fell as much as 8 to 6.68 amid broader market declines. L3N2X12UK

While the market may be preoccupied with macro factors today, we believe COTY39;s betterthanexpected results … should be taken positively on a standalone basis, Deutsche Bank analysts said.

The cosmetics maker, which has also raised prices to combat higher costs, saw its thirdquarter gross margin increase to 64.3. Adjusted pershare profit was 3 cents, beating estimates of 1 cent, according to Refinitiv IBES…