Cutera® Announces Exclusive Distribution Agreement With L’Oréal® for SkinCeuticals® Products in Japan

Rhea-AI Summary

Cutera (Nasdaq: CUTR) has announced an exclusive distribution agreement with L'Oréal Japan Co. to promote, market, sell, and distribute select SkinCeuticals products to medical and physician-led clinics in Japan. The partnership, initially spanning three years with renewal options, aims to expand access to high-quality skincare solutions in the Japanese aesthetics market.

Key points:

• L'Oréal Japan Co. will provide marketing and advertising support
• Cutera KK strengthens its position in the Japanese aesthetics market
• SkinCeuticals products will be introduced in Q4 2023
• Financial impact expected to be immaterial in 2024

Positive

• Exclusive distribution agreement with L'Oréal Japan Co. for SkinCeuticals products
• Expansion into high-quality skincare solutions for medical clinics in Japan
• L'Oréal Japan Co. to provide comprehensive marketing and advertising support
• Strengthens Cutera KK's position in the Japanese aesthetics market

Negative

• Financial impact of the distribution agreement expected to be immaterial in 2024

Insights

Market Research Analyst

This strategic partnership between Cutera and L'Oréal for SkinCeuticals distribution in Japan is an intriguing development in the aesthetics market. While the immediate financial impact is described as immaterial for 2024, the long-term implications could be significant.

The Japanese skincare market is notoriously competitive and sophisticated, with consumers known for their high standards and willingness to invest in premium products. SkinCeuticals, a respected brand in the medical-grade skincare segment, could potentially capture a significant share of this lucrative market.

However, it's worth noting that success is not guaranteed. The Japanese market has unique preferences and regulatory requirements that can pose challenges for foreign brands. L'Oréal's marketing support will be important in navigating these complexities and establishing SkinCeuticals' presence in medical clinics.

For Cutera, this deal represents a diversification of their revenue streams. While they're primarily known for aesthetic devices, adding a high-end skincare line to their portfolio could provide more stable, recurring revenue. It also positions them as a more comprehensive solution provider for their existing customer base of medical clinics.

Investors should monitor the progress of this partnership closely. Key metrics to watch include:

• Adoption rate among Cutera's existing Japanese customers
• Year-over-year revenue growth from SkinCeuticals sales
• Any synergies between device sales and skincare product sales
• Customer retention rates and feedback from participating clinics

While the immediate impact may be minimal, the long-term potential of this partnership could be a significant driver for Cutera's growth in the Asian market.

Financial Analyst

From a financial perspective, this distribution agreement presents an interesting opportunity for Cutera, albeit with some caveats. The company's statement that the financial impact will be immaterial in 2024 suggests a cautious approach to revenue projections, which is prudent given the complexities of entering a new market segment.

However, investors should look beyond the short-term outlook. The three-year initial agreement, with options for renewal, provides a solid timeframe for Cutera to establish and grow this new revenue stream. The partnership with L'Oréal, a global beauty powerhouse, lends credibility and marketing muscle to the venture.

Key financial considerations include:

• Margin potential: Skincare products typically offer higher margins than medical devices. If successful, this could positively impact Cutera's overall profitability.
• Operating expenses: While L'Oréal is providing marketing support, there will likely be some additional costs for Cutera in terms of inventory management and distribution.
• Revenue diversification: This move reduces Cutera's reliance on device sales, potentially smoothing out revenue fluctuations.
• Market expansion: Success in Japan could pave the way for similar agreements in other markets, amplifying the long-term revenue potential.

It's important to note that Cutera's stock (NASDAQ: CUTR) has faced significant challenges recently, with a -80% year-to-date decline as of my last market check. This partnership, while promising, is unlikely to be a quick fix for the company's broader financial challenges. Investors should view this as part of a longer-term strategy rather than an immediate catalyst for stock price recovery.

In conclusion, while the near-term financial impact may be , this agreement could represent a valuable pivot in Cutera's business model, potentially setting the stage for more stable and diversified revenue streams in the future.

BRISBANE, Calif.--(BUSINESS WIRE)-- CUTERA, INC. (Nasdaq: CUTR), a leading provider of aesthetic and dermatology solutions, and its Japanese subsidiary, Cutera KK, are pleased to announce a strategic partnership with L’Oréal Japan Co. to exclusively promote, market, sell and distribute select SkinCeuticals products to medical and physician-led clinics in Japan.

"We are excited about this collaboration with L'Oréal Japan Co. to bring SkinCeuticals' renowned skincare innovations to aesthetic providers in Japan," said Brent Hauser, Cutera’s International President. "This agreement underscores our commitment to supporting our existing customer base by expanding access to high-quality skincare solutions that meet the unique needs of medical clinics and their patients."

Under the terms of the agreement, the partnership will initially span three years, with options for renewal. As part of the collaboration, L'Oréal Japan Co. will provide comprehensive marketing and advertising support to enhance the visibility and reach of SkinCeuticals products within the medical community. This agreement solidifies Cutera KK's position as a key player in the Japanese aesthetics market, leveraging its established network and expertise in medical aesthetics.

“We look forward to contributing to the acceleration of growth of SkinCeuticals in Japan, leveraging Cutera KK's strong presence and L'Oréal's global expertise in skincare," added Mr. Hauser.

Cutera plans to introduce the SkinCeuticals product line to customers in Japan during the fourth quarter of this year. The company expects the financial impact of the distribution agreement to be immaterial in 2024.

About Cutera, Inc.

Cutera is a leading provider of aesthetic and dermatology solutions for practitioners worldwide. For over 25 years, Cutera has strived to improve lives through medical aesthetic technologies that are driven by science and powered through partnerships. For more information, call 1-888-4-CUTERA or visit Cutera.com.

About L’Oréal

For 115 years, L’Oréal, the world’s leading beauty player, has devoted itself to one thing only: fulfilling the beauty aspirations of consumers around the world. Our purpose, to create the beauty that moves the world, defines our approach to beauty as essential, inclusive, ethical, generous and committed to social and environmental sustainability. With our broad portfolio of 37 international brands and ambitious sustainability commitments in our L’Oréal for the Future programme, we offer each and every person around the world the best in terms of quality, efficacy, safety, sincerity and responsibility, while celebrating beauty in its infinite plurality.

More information on https://www.loreal.com/en/mediaroom

Safe Harbor Statement

Certain statements in this press release, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include but are not limited to, Cutera’s plans, objectives, strategies, financial performance, guidance and outlook, product launches and performance, trends, prospects, or future events and involve known and unknown risks that are difficult to predict. As a result, the Company’s actual financial results, performance, achievements, or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as, but not limited to, “may,” “could,” “seek,” “guidance,” “predict,” “potential,” “likely,” “believe,” “will,” “should,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “forecast,” “foresee” or variations of these terms and similar expressions or the negative of these terms or similar expressions. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks and uncertainties, which may cause Cutera's actual results to differ materially from the statements contained herein. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are several risks, uncertainties, and other important factors, many of which are beyond the Company’s control, that could cause its actual results to differ materially from the forward-looking statements contained in this press release, including those described in the “Risk Factors” section of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other documents filed from time to time with the United States Securities and Exchange Commission by Cutera.

All statements made in this release are made only as of the date set forth at the beginning of this release. Accordingly, undue reliance should not be placed on forward-looking statements. Cutera undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date they were made, or to reflect the occurrence of unanticipated events. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates concerning those or other forward-looking statements. Cutera's financial performance for the first quarter ended March 31, 2024, as discussed in this release, is preliminary and unaudited, and subject to adjustment.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731287453/en/

Cutera Investor Relations Contact:

Shelby Eckerman, VP, Finance

IR@Cutera.com

Source: Cutera, Inc.

FAQ

What is the new distribution agreement between Cutera and L'Oréal Japan Co. for CUTR stock?

Cutera (CUTR) has signed an exclusive distribution agreement with L'Oréal Japan Co. to promote, market, sell, and distribute select SkinCeuticals products to medical and physician-led clinics in Japan.

When will Cutera introduce SkinCeuticals products in Japan for CUTR investors?

Cutera plans to introduce the SkinCeuticals product line to customers in Japan during the fourth quarter of 2023.

What is the expected financial impact of the L'Oréal distribution agreement on CUTR stock in 2024?

Cutera expects the financial impact of the distribution agreement with L'Oréal Japan Co. to be immaterial in 2024.

How long is the initial term of Cutera's distribution agreement with L'Oréal Japan Co. for CUTR shareholders?

The initial term of the distribution agreement between Cutera and L'Oréal Japan Co. is three years, with options for renewal.