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Loss Narrows for Coty; CFO Resigns

The company's luxury and professional divisions are posting growth, while consumer is still struggling.

Coty Inc.’s chief financial officer, Patrice de Talhouët, is leaving the business to pursue other opportunities.

He is to stay on board through September and assist with a transition. Coty plans to hire an executive search firm to find his successor.

Over the past two years, de Talhouët has worked to integrate the 41 beauty brands that Coty acquired from Procter & Gamble, among other things.

“His leadership was especially important during Coty’s integration of the P&G Specialty Beauty Business, which is now largely complete,” said Coty chief executive officer Camillo Pane.

Ayesha Zafar, Coty senior vice president and group controller, will serve as interim cfo as of Sept. 15.

News of de Talhouët’s departure came in tandem with Coty’s financial results.

For the full year, the business posted $9.4 billion in net sales, a 22.8 percent increase driven primarily by growth in the luxury division, which grew 6 percent. Professional Beauty grew 1.7 percent, slightly offsetting the 4 percent decline in Consumer Beauty. The business posted a net loss of $168.8 million, narrowed from the prior year’s $422.2 million loss.

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For the fourth quarter, Coty posted $2.3 billion in net sales, up 3 percent from the prior-year period. The business also posted a $181.3 million loss — narrowed by 41 percent from the prior year — and diluted adjusted earnings per share of 14 cents. In the quarter, Luxury grew 5.3 percent, Professional grew 2.1 percent and Consumer Beauty declined 3.4 percent.

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For fiscal 2019, Coty is targeting EPS of 74 cents to 78 cents.

“Financial performance across quarters in [fiscal year 2019] will not be linear,” Pane said in a statement. “The peak of the impact of the supply chain disruptions due to our logistics and manufacturing consolidation will come in [the first quarter of 2019], with a smaller tail end in [the second quarter]. This will have a significant impact on both top and bottom line and, together with the impact of our brand rationalization program, is expected to drive a low teens decline in our [first quarter of fiscal 2019] adjusted operating income year-over-year. Having said that, we do expect that these business integration related impacts will be largely over by the end of first half 2019 and our [fiscal 2019] targets take these disruptions into consideration.”