Coty has shared financial results for the first quarter of 2016, with Chairman and Interim CEO Bart Brecht admitting that the figures were “mixed”.
The company is still in the process of purchasing 43 brands from P&G for a total of $12.5bn and last week announced that it would buy Brazil’s Hypermarcas SA. Alongside its results, the company also shared that the financing structure for the P&G transaction was now in place.
The transaction is now expected to close in the second half of calendar 2016.
Perfume sales dropped 8%, due to what Brecht described as “unsustainable historical launches not being compensated by current brand building efforts”. Although he added: “We will be working hard to clean up past portfolio practices, while strengthening our innovation pipeline and improving our capabilities in the areas of innovation and sales & marketing execution.”
Elsewhere, revenues from colour cosmetics increased 9%, which Coty said was down to “power brands” Sally Hansen, Rimmel and OPI.
Skin and body care declined by 1%, thanks to lower net revenues from Playboy and Philosophy, although Brecht said that “trends are improving” in this area.
Asia Pacific maintained solid growth for the brand, with a 4% increase in revenues in the region. However revenues saw a 3% decline in EMEA and the Americas. UK and travel retail declined further but growth in Eastern Europe and Germany partially offset this.
Coty was overall pleased with its profits for the period. Brecht said: “The operating profit and margin continued showing very strong progress and earnings per share growth was up well ahead of profit growth, also helped by a one-off tax benefit.”
Brecht concluded: “We continue to believe that our strategy of investment in growing our power brands while bringing Coty back to profitable growth behind our efficiency programs, remains the right basis for delivering shareholder value over time.”
