Coty Inc. reported a steep jump in net income for the first quarter, with profits rising to $125.7 million, compared with $10.6 million in the year-ago period. Adjusted net income was $219.7 million, or 59 cents a diluted share, compared with $103 million, or 28 cents a share, in the prior-year period, largely due to a favorable tax settlement of $113.3 million.
The company’s net revenue for the three months ended Sept. 30 declined 6 percent to $1.11 billion, or 2 percent in constant currency, dragged down by a 14 percent decline in fragrance sales in the quarter.
Bart Becht, chairman and interim chief executive officer, stated the company is making good progress preparing for the planned merger with 43 Procter & Gamble Co. beauty brands. “Over the last few months, the financing structure for this transaction has been put in place. Extensive discussions with the 12 licensors have taken place with respect to the transfer of their fragrance licenses to Coty. To date, 10 out of the 12 licenses will transfer to Coty upon regulatory approval and completion of the transaction. This has allowed us to stay on track with the regulatory clearance process. As a result, we continue to anticipate a closure of the transaction in the second half of calendar 2016.”
Coty has had a busy week so far, revealing on Monday the acquisition of several Brazilian beauty brands for $1 billion, and then on Tuesday unveiling a major restructuring that involved the setting up of three divisions for its various operations as well as the move of its headquarters to London.