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Coty Bids for Avon



Published April 30, 2012
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Coty Bids for Avon

• Coty Inc. made an unsolicited $10 billion bid for Avon Products last month, which was promptly rejected by the board of the world’s biggest direct selling company. A wounded Avon became a target after several years of lackluster results, an unsettled executive suite and questionable dealings in overseas markets.

In rejecting the Coty offer, Avon said it was focused on finding a CEO to replace Andrea Jung, who would remain as chairman. It then named Sherilyn S. (Sheri) McCoy as chief executive officer in late April.

Coty chairman Bart Becht spoke to Avon investors during a conference call on April 16 hosted by Sanford C. Bernstein & Co. analyst Ali Dibadj. According to the call, Coty has lined up $14 billion of financing commitments for its proposed $10 billion acquisition of Avon.

Profits Rise at Symrise for 2011
Symrise AG’s fiscal 2011 net profits rose 9.7% to $204 million due to the effects of refinancing completed in 2010 and the corresponding reduction in financing expenses, according to reports.
For the year, company sales rose 0.7% to $2.21 billion. Sales for Symrise’s scent and care division rose 0.4% to $1.12 billion.

For 2012, the company expects a 2-4% rise in sales.

Sales Increase 3% At Physicians Formula
Physicians Formula Holdings reported 2011 sales rose 3.1% to $80.9 million. The gain was driven by an increase in gross sales of color cosmetics, launch of the skin care line and a reduction to the returns provision.

The company also stated that its products achieved 9% point-of-sale growth for the 52 weeks ended Dec. 24, 2011, whereas the overall masstige color cosmetics category only grew 3%, both per AC Nielsen food, drug and mass dollar sales data. During the same time period, Physicians Formula was the fastest-growing masstige color cosmetics brand in dollar sales among the major five brands in food, drug and mass.

Ingrid Jackel, chairwoman and CEO, stated, “We are pleased with the execution and results of our 2011 brand investment strategy. The carefully planned spending allowed us to successfully build upon our existing brand awareness and expand our market share of the masstige category. For the year, we were the brand with the greatest increase in dollar market share among the top five brands.”

Group Sales Maintained At Beiersdorf for Year
Beiersdorf Group’s sales for fiscal year 2011 rose 1.1% to $7.3 billion. The consumer business segment’s sales increased 1.1% to $6.1 billion. The company’s three global skin care brands, Nivea, Eucerin and La Prairie, all contributed to the gains.

By region, business in the UK and Russia was extremely positive, while sales in other European countries did not match prior-year levels due to the streamlining of the product range, among other things. The segment’s growth in Latin America was particularly strong. In the Africa/Asia/Australia region, sales were up only slightly on the previous year, due to the impact of the reorganization of business structures in China.

On April 26, Stefan F. Heidenreich took over as CEO following the annual general meeting.

Henkel Eyes Cuts After Q4 Slump
In an effort to boost profit margins, Henkel says it will embark on a campaign to cut costs and boost its profit margins after fourth-quarter results came in below expectations.

“Henkel intends to further adapt its structures to the constantly changing market conditions while maintaining its strict cost discipline,” the company said, citing a challenging economic environment and high raw material costs.

The group, whose brands include Persil detergent and Schwarzkopf hair products, confirmed its 2012 targets for adjusted EBIT margin of 14% and sales growth of between 3-5%.

The 2011 margin was 13.2%.

However, analysts are skeptical that Henkel will reach the 2012 margin target given the expected slowdown in the global economy, with the average forecast at 13.5. Rival Unilever said 2012 will be a difficult year, while Procter & Gamble has announced thousands of job cuts in a bid to trim costs.

Annual Sales Climb 7% For Yankee Candle
Yankee Holding Corp. and The Yankee Candle Company, Inc. posted favorable financial results for the full year and fourth quarter ended Dec. 31, 2011.

Sales for the fourth quarter of 2011 rose 8.6% to $316.6 million.Retail sales increased 7.5% to $216.5 million, while sales in the company’s wholesale segment rose 2.6% to $66.4 million. Sales in the company’s international segment, which is being reported as a separate business segment beginning in 2011 after having previously been included in the wholesale segment, climbed 32.1% to $33.7 million. Net income for the company jumped 5.8% to $54.8 million for the fourth quarter of 2011.

For fiscal 2011, total company sales increased 7.1% to $785.8 million. Retail sales rose 5.4% over the prior year to $449.2 million and wholesale sales increased 1.2% to $235.2 million. Sales in the company’s international segment climbed 35.4% to $101.3 million. The company generated net income of $54.5 million for fiscal 2011, an increase of 30%.

Q4, Fiscal 2011 Gains At Inter Parfums
Inter Parfums, Inc. said 2011 sales increased 34% to a record $615.2 million from the prior year. Net income attributable to Inter Parfums, Inc. rose 21% to a record $32.3 million.

For the fourth quarter, net sales rose 68% to $189.1 million. European-based operations generated net sales of $169.6 million, up 78%. Net sales by US-based operations were up nearly 15% to $19.5 million, according to the company.

Year of Growth at Ulta
Ulta’s sales for the year ended Jan. 28, 2012, increased 22.1% to $1.8 billion. Comparable store sales (sales for stores open at least 14 months) increased 10.9%, while operating income increased 65.0% to $196.2 million. Net income increased 69.3% to $120.3 million.

For fiscal 2012, the company plans to achieve comparable store sales growth at or slightly above the high end of its long-term goal of 3-5%.

In other news, Gregg R. Bodnar, the CFO and assistant secretary, is stepping down for personal reasons. However, Bodnar will remain in his present position pending the appointment of his successor and will assist in the transition of his successor. He joined Ulta as CFO in September 2006.

Global Repositioning Successful at Arden
Elizabeth Arden, Inc. posted financial results for its second fiscal quarter and six months ended Dec. 31, 2011. Net sales climbed 6% to $429.9 million. For the company’s international business, net sales increased 9.4%. Sales growth was highest in the European and travel retail and distributor markets. Net sales in North America grew 4.4%, driven by strong growth in the company’s prestige business, where net sales increased 20%.

For the six months ended Dec. 31, 2011, the company reported that net sales rose 6.2% to $733.5 million.

“We continued to expand sales of the Elizabeth Arden brand and our fragrance portfolio,” said Scott Beattie, CEO. “Global sales of Elizabeth Arden branded products grew 12% fiscal year-to-date with sales of the skin care and color cosmetic portfolio increasing by 20% and 16%, respectively.”

According to Beattie, global repositioning of the Elizabeth Arden brand will impact almost every aspect
of the brand and its products.

“We are in the process of presenting our plans to key accounts globally, and based on the overwhelmingly positive feedback received so far, have begun to accelerate the roll-out of the new Elizabeth Arden brand,” he said.

In addition, the Taylor Swift fragrance Wonderstruck performed exceedingly well, achieving the No. 2 ranking among women’s fragrance launches in US department stores for the important holiday season, and contributed to the strong performance of Arden’s North American prestige department store business.

“While the global economic environment remains uncertain, we are confident that we can continue to increase the sales of our brand portfolio and improve margins to drive strong cash flow and earnings growth,” he said.

The company is confirming its fiscal 2012 guidance for net sales growth of 5-6% over the prior year.


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