Reported net income decreased from $93.5m to $10.6m
Coty, which owns beauty brands including OPI (pictured), Chloé and Sally Hansen, has revealed its financial results for Q1 2015. Net revenues increased 1% like-for-like to a total of $1,182.3m, although adjusted operating income decreased from $186.1m in the prior year period to $167.1m. Meanwhile, reported net income decreased from $93.5m to $10.6m “primarily due to expense on early extinguishment of debt and restructuring charges”.
Bart Becht, Chairman and interim CEO of Coty, said: “Q1 was a quarter of good strategic progress but mixed financial results. Our strategy of focusing on our power brands showed signs of progress, as power brands' revenues grew mid-single digits due to exciting innovations like Sally Hansen Miracle Gel or Marc Jacobs Daisy Dream as well as higher support levels. While power brands, accounting for over 70% of revenues, showed strong growth, total company growth was just 1% on a like-for-like basis due to revenue declines on the balance of our portfolio. While adjusted operating profits for the quarter were lower primarily due to higher power brand support levels, adjusted EPS was flat due to a lower tax rate compared to the prior year and the benefits from our Share Repurchase Program.
“As we look forward, we are aiming to gradually return Coty to profitable growth. To that end we will remain firmly focused on growing our power brands around the world behind innovation, strong support levels and improving market execution. This, combined with our $200m Global Efficiency Plan, should help us make progress against the target over time.”
Speaking of Coty's recent announcement of its intention to buy Bourjois in exchange for Coty Class A shares, Becht added: “We are very happy with the anticipated addition of this historic and prestigious brand into our color cosmetics portfolio as we believe it not only strengthens our global color position, it materially increases our critical mass in France, Bourjois' main market. We are equally looking forward to having Chanel, a power house in fashion and cosmetics, as a key shareholder in our company.”