Coty Posts Huge Lockdown Losses & 56% Sales Slump
Coty Inc “posted a bigger-than-expected quarterly loss and a 56% slump in sales, as the coronavirus-induced closure of stores and parlours hammered demand for its beauty products,” reports Reuters. Shares of the New York-based cosmetics giant were down own 4% in premarket trade – German conglomerate JAB Holding Co holds the majority of Coty’s shares.
Saddled with debt, Coty has been trying to revive the business by “roping in former L’Oreal SA OREP.PA executive Sue Nabi as its chief executive officer and also investing in upstart brands, including that of reality TV star Kylie Jenner,” the report says. “Coty is now planning to sell or shutter most of its factories and outsource more operations to deal with the fallout from the COVID-19 crisis, the Financial Times reported on Thursday, quoting Coty Chairman Peter Harf.”
Coty’s consumer beauty segment with brands such as Cover Girl is known to have suffered a 55% sales plunge, while its luxury unit posted 71% in the fourth quarter that ended on June 30th. “Net revenue fell to $922.1 million, missing expectations of $1.34 billion. Excluding items, Coty lost 51 cents per share, bigger than estimates of 12 cents, as per IBES data from Refinitiv,” adds the Reuters report.