Breaking News

Tough Q2 For Coty

February 14, 2014

Softness in US mass fragrance and nail categories.

Coty has reported that net revenues for the first half of fiscal 2014 were $2.50 billion, down 3% like-for-like and 4% as reported relative to the prior-year period. Adjusted operating income of $369.4 million decreased from $423.7 million in the prior-year period and adjusted net income of $219.6 million decreased from $244.9 million in the prior-year period.
 
"We faced a challenging second quarter, as expected. U.S. market softness particularly in the mass fragrance and nail categories, and the high level of promotional activity through the holiday season, have impacted our performance in mature markets,” said Michele Scannavini, CEO of Coty Inc.. “On a more positive note, our investment in the emerging markets is starting to yield positive results, with solid growth driven by Brazil, Southeast Asia, and South Africa.

For the second quarter, net revenues came in at $1.3 billion, down 4% like-for-like and as reported relative to the prior-year period. Adjusted operating income of $183.3 million decreased from $220.7 million in the prior-year period and adjusted net income of $111.3 million decreased from $127.1 million in the prior-year period, the company said.

According to Coty, in the second quarter, positive gross sales growth was more than offset by increased discounts and allowances, reflecting high competitive pressure in this soft market dynamic. By region, the decline was driven by the Americas, reflecting challenging U.S. market conditions in the mass retail channel, particularly in nail and fragrances. EMEA net revenues marginally decreased in the quarter, as strong results in Eastern Europe and South Africa were more than offset by continued softness in Southern Europe. Asia Pacific increased 2% in the quarter. Emerging Markets had solid 6% growth, driven by Southeast Asia, Brazil, and South Africa, where the Company is positively leveraging the new commercial structures.

By segment, color cosmetics decreased 9% versus the prior year period driven by the decline in Sally Hansen, strongly affected by the negative dynamic in the US nail market and the unfavorable comparison with the substantial gel technology launch in the prior year period, the firm said. Net of Sally Hansen, Color Cosmetics grew, mainly thanks to strong Rimmel performance.

Fragrances declined 2% versus prior year, reflecting the timing of new launch activity, the impact of expired licenses, and high promotional activity, particularly in the declining mass fragrance market.

Skin and body care decreased 2%, as solid growth in philosophy was more than offset by the difficulties faced by the TJoy brand in China. Net of TJoy, skin and body care grew in the low single digits in the quarter and the last six months, according to Coty.
  • Sparkle & Shine

    Sparkle & Shine

    Melissa Meisel, Associate Editor||November 21, 2016
    Glam packaging and upscale scent combos are big at Yankee Candle for Holiday 2016.

  • Cos Bar: Turning 40 and Hitting Fast Forward

    Cos Bar: Turning 40 and Hitting Fast Forward

    Christine Esposito, Associate Editor||November 21, 2016
    With a recent investor infusion, a new CEO and rebranding effort underway, this luxury beauty retailer has big plans.

  • Organic Matter

    Organic Matter

    Christine Esposito, Associate Editor||November 14, 2016
    FTC and USDA hold a public roundtable to discuss consumers’ perception of organic claims.

  • The World Comes to Orlando

    The World Comes to Orlando

    Tom Branna , Editorial Director||December 1, 2016
    More than 1,600 chemists traveled to Florida for the IFSCC Congress

  • The Plex  Phenomenon

    The Plex Phenomenon

    Denise Costrini, Croda North America||December 1, 2016
    Croda details the hair-protecting qualities of bond multipliers and the company’s new bond-building formulation system.