Coty Q3 Revenue Falls 3% As Lockdowns In Europe Dent Makeup Demand
Cosmetics maker Coty Inc has reported a third-quarter revenue decline of 3.3%, as sales of its beauty products were pressured by COVID-19 lockdowns.
Restrictions in certain parts of Europe, including UK and France, imposed to curb surging virus cases hampered demand for the company's products including Rimmel lipsticks.
Coty's revenue from continuing operations on a reported basis fell to $1.03 billion in the quarter from $1.06 billion.
Analysts had expected revenue of $1.03 billion, according to IBES data from Refinitiv.
Net loss attributable to common stockholders was $18.5 million, or 2 cents per share, in the quarter ended 31 March, compared with a loss of $271.6 million, or 36 cents per share, a year earlier.
The reported quarter included an operating loss of $1.4 million, compared with an operating loss of $299.5 million a year earlier.
The company added that its results were buoyed by 20% like-for-like growth in Asia Pacific, 30% growth in e-commerce, and a relatively stable performance in the Americas, including strong growth in US prestige sales.
Its Gucci, Burberry and Marc Jacobs brands reported double digit growth during the quarter.
In the mass channel, Coty’s strategic plans delivered early results, with CoverGirl gaining market share over the last five weeks, recent data has revealed.
While Coty's mass beauty revenues in declined 14.5% in the third quarter, its mass beauty sell-out returned to growth in March.
Commenting on the operating results, Coty CEO Sue Y Nabi, said, "From a results standpoint, in the third quarter we saw a significant improvement in our sales trends even as we continued our efforts to strengthen the health of our business and brands. Importantly, the prestige sales returned to growth as the impact of the pandemic abated in many markets.
"We have seen strong momentum in several of our key markets, with China sales growing double-to-triple digits versus FY20 and FY19, and US prestige sales up high single digits in the quarter and nearly flat in the fiscal year-to-date. While Europe sales remain under pressure, we are confident that the imminent lifting of COVID restrictions will drive improvement in this key region."