Coty’s shares leapt some 27 percent in value on Friday after new CEO Pierre Laubies pledged to ‘work strongly’ to turn its tricky consumer beauty division’s fortunes around, according to a report published by the Financial Times.
“There are some issues with how we market the Cover girl brand, and the team is taking stock. The brand deserves better and we’ll work strongly to turn it around,” Laubies said on an analyst call on Friday, per the Financial Times.
Prior to Friday’s upsurge, the stock had lost more than two-thirds of its value since Coty acquired the P&G beauty portfolio back in 2015.
Coty second quarter results beat market expectations with sales for the three months ended December 31, 2018 dropping 4.8 percent to US$2.511 billion.
“Since I joined the company a few months ago, I have been thoroughly evaluating each part of our business, working to assess what has and has not worked, and where the opportunities lie,” commented Laubies. “Within Coty, there are clear opportunities to improve how we run our company in order to enhance the quality of our business model, thereby giving us the time that we need to address our more strategic issues. I must stress that while we are confident that we can return Coty to a path of sustainable growth, we are also realistic that it will take time to achieve this outcome. Our Luxury and Professional Beauty divisions are growing reasonably well, but they cannot compensate completely for the difficult trajectory of our Consumer Beauty division. In Consumer Beauty, we need to earn our right to grow.”