Coty Swings to a Loss Amid Acquisition Costs
03 May 2016 - 11:26PM
Dow Jones News
By Lisa Beilfuss
Coty Inc. swung to a loss in its latest quarter as the
beauty-products maker continues to book charges associated with
recent acquisitions.
The company in September announced plans to fold in Procter
& Gamble's beauty portfolio for $13 billion, adding about 40
brands including CoverGirl makeup and Clairol hair dyes.
Coty on Tuesday said it expects the transaction to close in
October, and that it expects incurring $1.2 billion of one-off
costs over the next four years related to integrating the
businesses and closing the deal.
Meanwhile, Coty in February closed a deal to buy the personal
care and beauty business of Hypermarcas SA for about $1 billion,
expanding its footprint in Brazil. That business contributed $14.3
million in sales during the March quarter, but it posted an
operating loss of $6.6 million due to integration charges.
For the period, Coty reported a total of $37 million in
acquisition-related costs. Such charges offset the impact of
slightly higher revenue, resulting in a loss of $26.8 million, or 8
cents a share. That is down from a profit of $75.5 million, or 21
cents a share, a year earlier.
Excluding merger-related costs, among other items, per-share
profit fell to 9 cents from 18 cents.
Revenue edged up 1.8% to $950.7 million. Analysts expected 12
cents in adjusted earnings per share and $970.7 million in sales,
according to Thomson Reuters.
The revenue increase was thanks to a 11% rise in color cosmetic
sales. Fragrance and skin care sales declined 4% and 12%,
respectively, from a year earlier.
Shares in the company, up 21% since the start of the year, were
inactive during premarket trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
May 03, 2016 09:11 ET (13:11 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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