Coty Sales Slip 10.4 Percent, But Loss Narrows
Coty Inc. sales continued to slip in its fiscal third quarter, but new chief executive officer Pierre Laubies is creating a plan to hoist them up.
"We must capitalize on the solid results of the Luxury and Professional Beauty divisions, and address the weakness of the Consumer Beauty division's performance via shelf productivity, product range simplification and brand investment at scale. Those are the main priorities of the strategic plan that we are completing and which we will start deploying as soon as fiscal 2020," Laubies said in a statement.
For the quarter, Coty, which owns brands like CoverGirl, Philosophy and Ghd, posted $1.99 billion in sales, down 10.4 percent from the prior year period. Net loss narrowed to $12.1 million, and reported diluted loss per share was 2 cents.
The company cited growth in the Luxury segment, "slightly negative" results from the Professional Division and a 10 percent decline in the still-struggling Consumer Beauty segment.
Coty's business has also been affected by supply chain disruptions, which it has worked to fix. The company estimates that year-to-date, supply chain issues have impacted net sales by $150 million.
"Third-quarter results clearly indicate that supply issues are largely resolved and we expect very limited impact from supply chain disruption on the business in the remainder of fiscal 2019," Laubies noted.
For the nine months ended March 31, Coty posted $6.5 billion in sales, down 8 percent year-over-year. Net loss was $984.8 million, and reported diluted loss per share was $1.31.
Coty took an impairment charge earlier this year due to the Cover Girl and Clairol trademarks that is causing that larger net loss figure.
"While we have achieved good profit delivery, the weak top-line result demonstrates that there is still much to be done to turn around the business," Laubies said.
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