Coty remains on target despite revenue and net income decrease
Coty on Thursday reported its second quarter results for fiscal 2017, the first quarter after its acquisition of P&G Beauty.
Net revenues decreased 4% in constant currency to $2,296.7 million and net income decreased to $46.8 million from $89.0 million in the prior year’s comparable period. Reported operating loss was $12.7 million, which decreased from $152.4 million in the previous year, and adjusted operating income increased 32% to $308.0 million from $233.4 million. In addition, adjusted earnings per diluted share decreased to $0.30 from $0.44.
Net revenues for the first six months of fiscal 2017 decreased 4% in constant currency to $3,376.9 million and net income decreased to $46.8 million from $214.7 million from $214.7 million.
The company reports that the second quarter results are consistent with 2017 being a transitional year, and Camillo Pane, Coty’s new CEO, is very optimistic about the company’s performance.
Pane said, “The business was impacted by significantly higher-than-anticipated inventory levels in the market on the acquired P&G Beauty Business, competitive pressure in the Consumer Beauty division and the distraction associated with the merger integration efforts. Fiscal 2017 is a transitional year as previously discussed, and it is Year One in my five-year strategic framework. We believe the combined company net revenue decline in constant currency will slow down for the second half of fiscal 2017, excluding Younique and ghd.”
The CEO also reiterated the previously announced $750 million synergy target for 2020, and he said the company is exploring alternatives for brands in the non-core portfolio.
Coty completed its merger with P&G Beauty in October 2016. The company was reorganized into three divisions following the merger, which are Coty Consumer Beauty, Coty Luxury and Coty Professional Beauty. Revenues slipped for Coty in its first quarter, which was expected to continue into the second quarter.
In January, the company acquired Younique for about $600 million.
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