Coty sees revenue growth in Q3, partners with Avon

NEW YORK — Coty announced on Wednesday that its third-quarter net revenues returned to growth, with increases in fragrances and skin and body care during the quarter.

The beauty company also announced on Wednesday a partnership with Avon, by which select Coty fragrances will be marketed and sold through Avon Brazil's network of 1.5 million independent sales representatives.

For the quarter ended March 31, net revenues totaled about $1 billion, up 2% on a like-for-like basis and 1% on a reported basis compared with the prior-year period.

In fragrance, revenues grew 6%, supported by growth in 4-out-of-5 Coty’s fragrance power brands — Calvin Klein, Davidoff, Marc Jacobs and Playboy.

Skin and body care revenues increased 8%, as philosophy continued its growth momentum, Adidas benefited from its traction in the emerging markets, and Lancaster saw strong growth particularly in the sun category.

Color cosmetics declined 6%, reflecting continued pressure on the nail category in the United States, partially offset by strong Rimmel performance.

Net income decreased to a net income loss of $253 million from net income of $20.4 million in the prior-year period. Coty stated that the decrease primarily reflected lower operating income as a result of the asset impairment, partially offset by lower interest expense and the income tax benefit during the quarter.

"Coty returned to revenues growth in the third quarter. The majority of our power brands showed positive development thanks to a competitive innovation program and growth in the emerging markets accelerated to 15%. Both prove our strategic focus on these brands and geographies is starting to bear fruit. While market conditions remain challenging in some product segments in parts of the world, we are sticking to our current strategy and targeting for continued growth for the remainder of the calendar year while working to significantly improve the cost profile of the business,” said Michele Scannavini, CEO of Coty. 

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