Coty results show both sales and profits sliding
The company posted a 1.7% increase in reported sales for its luxury division during the quarter to $754.7 million, but it was not enough to turn around the performance of the London headquartered business’s other divisions.
Net revenues for the fourth quarter were $2.115 billion, while the full year results were $8.648 billion, which also represented a fall of 8.0% compared to the full year results for 2017/18.
Results in line with February guidance
The company said that the results were in line with the company’s guidance, which was confirmed in February, with the Consumer Beauty and Professional Beauty divisions both posting significant loss of sales.
“We are now fully engaged in FY20. Our Turnaround Plan focuses on reshaping and simplifying our beauty business to generate fuel for growth and leverage the potential of our Consumer Beauty brands, while continuing to improve growth and margins in our Luxury and Professional Beauty divisions,” Pierre Laubies, Coty CEO said
“Our plan will deliver gradually, but we expect dynamics to start changing as soon as this upcoming year, as reflected in our targets for FY20."
Consumer and Professional Beauty suffer
The Consumer Beauty division posted third quarter sales of $2.697.3 billion, a drop of 15.2% on a reported basis, while the Professional Beauty division posted reported sales of $458.3 million for the period, a fall of 7%
The company said that the weak performance of the Consumer Beauty division was down to brand share loss and a continued weakness in the mass beauty market in both Europe and North America.
The slower performance in the Professional Beauty division was put down to weakness in this category in the North American region, which it said was due to supply chain disruptions and trade inventory reductions.
Regional break down
Europe currently accounts for the largest share of the company’s sales, slicing up approximately 44%. In this region net revenues for the full year came in at $3.77 billion, which represented a year-on-year decline of 10% on a reported basis.
In North America, which accounts for 33% of total sales, the full year reported revenues were also down 10% to $2.65 billion, a decline attributed to weaknesses in both Consumer and Professional Beauty.
The performance in the ALMEA region, which accounts for 25% of sales faired better, with sales on a reported basis falling just 1% and increasing by 7% on a like-for-like basis to $2.21 billion, a result that was driven by a very strong performance in the luxury division.
