Coty Inc.’s sales were up for the first quarter of fiscal 2018, boosted by its acquisitions of Younique and Ghd.
The company posted a net loss of $19.7 million for the quarter. Net sales were $2.24 billion, up more than 100 percent from the prior-year period, which was before Coty closed the acquisition of the Procter & Gamble beauty portfolio. Combined company organic net revenue declined 2 percent excluding sales from newly-acquired Younique and Ghd. Loss per diluted share was 3 cents.
“Q1 was a much better quarter,” said Coty chief executive officer Camillo Pane. “We saw strong growth in Luxury, continued positive momentum in Professional and a reduced net revenue decline in the Consumer Beauty division. While results are likely to be a bit uneven from quarter to quarter going forward, the improving revenue trend gives me confidence that the growth strategy I outlined earlier this year is moving Coty gradually onto a path of full recovery.” He added that Coty has exited its final transitional service agreement with P&G and is now in full control of related processes, systems and data.
“We are also satisfied with the contributions from our other strategic acquisitions, Hypermarcas, ghd and Younique and continue to strengthen our overall portfolio through our strategic partnership with Burberry, an iconic brand that is an exciting addition to our portfolio,” Pane said. “We believe we are uniquely positioned to develop and grow this luxury brand to its full potential.”
Coty Luxury posted a 70 percent increase in sales for the quarter, with $764.4 million in net revenues from $449 million. Combined company year-over-year sales for the Luxury division were up 6 percent. The Consumer Beauty division was up 82 percent to $1.04 billion from $571.9 million — combined company sales were up 4 percent from the prior-year period. Sales in the Professional segment rose dramatically to $430.5 million from $59.3 million in the prior-year period. Combined company sales were up 15 percent year-over-year for that division.
In the Luxury division, sales reflected gains with Hugo Boss, Gucci and Tiffany & Co. In the Consumer Beauty segment, Younique was the main driver of sales growth, contributing 10 percent to the category. The rest of the business was down 8 percent in constant currency, reflecting weak performance in retail hair and softness in the global mass beauty market. The Professional division’s sales were driven by Ghd, Wella and System Professional, offset by declines at Clairol Professional.