Coty Earnings Fall

By Imani Moise 

Beauty-product maker Coty Inc., in the midst of integrating new businesses from Procter & Gamble Co., reported earnings fell in the most recent quarter.

Shares fell 7.4% to $18.55 during premarket trading Thursday.

Chief Executive Camillo Pane said business was hurt by higher-than-anticipated inventory levels, competitive pressure in the consumer beauty market and the distraction associated with integration efforts, but expects declines in net revenue on a constant currency basis to slow down in the back half of the year.

In June 2015, P&G announced it would shed brands such as Wella shampoos, Clairol hair dye and CoverGirl makeup and merge them with Coty Inc. in a complicated deal originally valued at $13 billion.

As reported, sales soared 90% during the quarter helped by the acquisition, but fell 4% on a constant currency basis. Sales declined even further excluding impact of the acquisitions.

In all for the second quarter, Coty reported a profit of $46.8 million, or 6 cents a share, down from $89 million, or 25 cents, a year earlier. On an adjusted basis, earnings fell to 30 cents from 44 cents.

Revenue rose to $2.3 billion. Excluding the acquisition, sales fell in the high single digits.

Analysts polled by Thomson Reuters had forecast earnings of 33 cents on $2.36 billion in revenue.

Gross margin fell to 61.1% from 61.4%.

Write to Imani Moise at [e-mail]

(END) Dow Jones Newswires

February 09, 2017 09:15 ET (14:15 GMT)

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