Coty Q4 profits ‘better than expected’

The cosmetics maker’s quarterly loss was cut significantly compared to last year as profits were up, and perfume brands Marc Jacobs and Chloe had a strong three months in Asia.

The Calvin Klein perfumer admitted that it expects its revenue to marginally decline from last year as mature markets in the US and Europe witnesses a slowdown, although a brighter future over the long-term is anticipated.

"Over the last few months, the company has seen a deceleration of market growth in the US and Europe, triggering significant trade de-stocking activity, particularly by US mass retailers​," says a company statement.

Deceleration​

This deceleration is expected to be offset by the developing countries as Coty expects a growing middle class in these regions to drive sales.

As such, the US firm plans to ramp up its business by increasing sales of its top brands and expand in developing parts of Asia and Latin America.

The main focus here is in the Fragrances segment which accounts for most of Coty's business, however its recent expansion in skin care and acquisitions in the color cosmetics field may pay dividends also.

Revenues​

Coty's revenue from fragrances and skin and body care products rose 6 percent in the fourth quarter, whilst overall revenue rose 3.9 percent to $1.06 billion, helped by a 11 percent growth in sales in Asia.

For the period ended June 30, Coty posted a loss of $62.3 million compared with a loss of $357.3 million the year before.

The previous twelve month period included write-downs of $473.9 million. Excluding those charges, stock-based compensation and other items, the company posted a profit of three cents a share, compared with a loss of a penny a year earlier.