American beauty product manufacturer Coty has revealed that its third quarter revenue was US$933.3m, a decrease of 7 percent compared to the same period last year.
Across product segments, third quarter net revenues for Skin and Body Care declined by 4 percent like-for-like, which Coty has attributed to lower revenues from adidas and Playboy brands as well the disruption caused by a business model change in China.
Fragrance revenues declined by 2 percent like-for-like as incremental net revenues from new launches failed to offset the declining sales of existing product lines.
However, net revenues for Coty’s Colour Cosmetics segment were up 6 percent due to demand for Rimmel and Sally Hansen brands and successful new product launches.
Overall, the company’s adjusted operating income was US$$100.9m, an increase of 24 percent from US$81.4m in the prior-year period. Net income was US$75.5m, an increased from US$253.3m in the prior-year, reflecting a one-time asset impairment charge in the prior-year period
Adjusted net income was US$63.6m, a decrease from US$86.7m in the prior-year period, which Coty states was largely due to a favorable foreign tax settlement occurring last year.
Adjusted earnings per diluted share of $0.18 decreased from $0.22 in the prior-year period. Net cash provided by operating activities was $33.2m compared to $4.2m in the prior-year period
Bart Becht, Chairman and Interim CEO commented, “We have made excellent progress in driving profit growth behind efficiency programs, as shown by the 24% growth in Q3 adjusted operating profits. As our success in this area is very good, we will be looking to increase the $200 million target for our Global Efficiency Plan.
“We will come back to this as part of our FY15 results discussion. Power brand and overall growth on the other hand is still muted despite some bright spots like Sally Hansen, Rimmel and Chloe. Now that we have created more space in the P&L through our efficiency programs, our objective is to re-invest part of those savings to steadily improve our growth track record going forward.”
Becht highlighted the recent appointments of Elio Leoni Sceti as CEO and Camillo Pane as EVO of Category Development as crucial the company’s growth strategy. Coty’s recent acquisition of Bourjois was also highlighted as “further strengthening Coty’s position in the global color cosmetics market.”
“Looking forward, we remain optimistic about Coty’s future and its ability to make steady progress under its new strategy. Specifically, for fiscal year 2015, adjusted earnings per diluted share are projected to be between $0.95 and $0.98, reflecting year-on-year growth between 17% and 21%,” Becht added.