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Fragrance, Color Cosmetics Drive Sales at Coty

September 17, 2013

Annual report shows 2% rise in revenue to $4.65 billion.

Coty Inc. posted financial results for the fourth quarter and fiscal year ended June 30, 2013. For the year, net revenues of $4.65 billion increased 2%, according to the report. Operating income rose 8% to $572.8 million, while net income increased 7% to $323.2 million. For the fourth quarter, net revenues increased 4% to $1.06 billion.
 
Commenting on the company's performance, Michele Scannavini, CEO of Coty Inc., said, "Coty delivered another year of positive financial performance.  Our increase in net revenues was driven by growth in our Fragrances and Color Cosmetics segments as well as positive developments across all regions, particularly the emerging markets.  Operating and net income grew faster than revenues, contributing to margin expansion and demonstrating our ongoing focus on operational efficiency.  We continue to show strong ability to convert earnings into cash, enabling us to keep investing to support our growth.  We remain committed to our long term strategy to grow revenues in line or faster than the markets and segments where we compete, and to grow earnings faster than sales, driving continuous margin expansion."
 
Increased net revenues in fragrances reflected strong growth in power brands Marc Jacobs, Chloe and Playboy, bolstered by the success of new launches DOT Marc Jacobs, See by Chloe and Playboy VIP. Also driving segment growth was the newly established brand Lady Gaga Fame and the strengthening of the Roberto Cavalli brand through new launches, including the extremely successful special edition fragrance for the Middle East, Roberto Cavalli Oud. Operating income for Fragrances increased 9% to $369.7 million.
 
Segment growth in Color Cosmetics was primarily driven by the outstanding development of the Rimmel brand, gaining market share in the US and Europe.  Its double-digit growth was driven by a creative and successful innovation plan and a cutting edge marketing mix, with an innovative and engaging digital program. N.Y.C. New York Color and Manhattan, the company's entry price level brands, also contributed to the growth of the segment.
Nail care brands OPI and Sally Hansen remained stable versus last year. Operating income for Color Cosmetics increased 4% to $208.8 million.
 
Skin & Body Care net revenues declined 4%. Adidas net revenues were impacted by soft market conditions in Europe and the lack of mega promotions related to major sport events compared to the prior year, which benefitted from Euro Cup promotional activities. Adidas experienced strong double- digit growth in China, leveraging the TJoy production and distribution platform, which partially offset the decline experienced in the TJoy brand. Philosophy, after a slow start to the year, progressively recovered momentum in the second half of the fiscal year, as a new innovation plan and international expansion started to kick in, said the company.
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