The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — Coty reported a loss for its fiscal third quarter due to an impairment charge, but its revenue rose thanks to growth in emerging markets.
The beauty care company's revenue and its profit excluding the charge each topped analysts' expectations.
In addition, Coty and Avon Products Inc. announced Wednesday that they have a deal to allow certain Coty fragrances to be marketed and sold through Avon Brazil's independent sales representatives. The New York companies signed a letter of intent for the commercial agreement in February.
Coty's fragrances include Madonna's Truth or Dare, Katy Perry's Killer Queen and several by Jennifer Lopez.
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For the period ended March 31, Coty Inc. lost $253.3 million, or 66 cents per share. That compares with a profit of $20.4 million, or 5 cents per share, a year earlier. Removing certain items, earnings were 22 cents per share.
Analysts, on average, predicted earnings of 9 cents per share, according to a FactSet survey.
Revenue rose to $1.01 billion from $997.7 million, bolstered by strength in emerging markets. This beat Wall Street's estimate of $999.9 million.
Sales of fragrances climbed 6 percent driven by higher sales of Calvin Klein, Davidoff, Marc Jacobs and Playboy. Skin and body care sales increased 8 percent, with the adidas brand doing well in emerging markets.
Coty, which went public in June, said that sales of color cosmetics fell 6 percent due to ongoing pressure in the U.S. nail category. That was somewhat offset by strength in the Rimmel brand.
By region, Asia Pacific sales jumped 19 percent. Emerging markets reported a 15 percent increase. Sales in Europe, the Middle East and Africa rose 8 percent.
In the Americas, sales declined 11 percent. The U.S. was hampered by softness in mass color cosmetics and overall fragrance markets. There was particular pressure in the nail category and the Sally Hansen brand.
Coty Inc. anticipates its fiscal fourth-quarter results will be "overall flat" as it's up against a strong prior-year performance.
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Its shares rose 16 cents to $15.60 in premarket trading 90 minutes ahead of the market opening.
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