Continued supply chain disruptions dented Coty Inc.’s results in the fiscal first quarter.
The beauty business posted a 9.2 percent drop in net sales, to about $2 billion, and a $12.1 million loss — widening by 39 percent from the prior-year period. Diluted loss per share was $0.02.
In its earnings statement, Coty said it encountered several temporary supply chain-related headwinds that impacted the numbers. The company said that warehouse and planning center consolidation disruptions in Europe and the U.S., as well as component shortages from external suppliers and Hurricane Florence in the U.S. (which impacted North Carolina manufacturing), all caused problems.
“We are very disappointed with the supply chain disruptions that we have experienced over the last quarter and the resulting poor Q1 financial performance,” said Coty chief executive officer Camillo Pane. “While we had anticipated some level of disruption in the first quarter from warehousing and planning consolidation, the increased scope of the disruptions resulted in much weaker results than previously expected.”
By division, Luxury posted a 3.7 percent sales gain to $792.9 million in the quarter, driven by momentum from Gucci, Tiffany, Miu Miu and Chloe fragrance sales.
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In the Consumer division, however, sales plummeted — down 20.6 percent, to $828.8 million. Part of that was because of the supply chain disruptions, but Coty said that the category’s developed markets deteriorated in the quarter.
The Professional segment posted a 4.9 percent dip in sales, to $409.6 million. Coty said the division continues to see solid growth from Wella and Ghd.