Aug 19 (Reuters) – Coty on Wednesday posted a surprise increase in fourth-quarter revenue on resilient demand for fragrances and cosmetics, and said it has appointed former British American Tobacco finance chief Soraya Benchikh as CFO.
Shares of the beauty company were down about 9% in extended trading after it posted a wider-than-expected quarterly loss, although it said fiscal 2027 would be a “transition year”.
The company is advancing its “Coty. Curated.” strategy to simplify its business and conducting a review of the consumer beauty division.
The review, expected to complete by year-end, could lead to the sale of brands such as CoverGirl and Rimmel.
The company said the CFO change was part of organizational changes it unveiled in early July under its “Coty. Curated” strategy.
Benchikh had also served as president, Europe at Diageo, and is replacing Laurent Mercier, who served as Coty’s finance chief for about five years.
The initiative, along with a cost-reduction program, would help offset a likely sales hit in fiscal 2028 from its early return of Gucci Beauty license to Kering, Coty said.
Coty’s net revenue rose 1.3% to $1.27 billion in the quarter ended June 30, compared with analysts’ average estimate of a 4.6% decline, according to data compiled by LSEG.
“Consumer demand for beauty remains resilient, with continued growth in fragrances and cosmetics, although consumers are becoming increasingly selective in their purchasing decisions,” the company said.
Coty said it saw a roughly 1% impact from the Middle East conflict, which was less severe than the 2% to 3% hit it forecast in May.
Quarterly adjusted loss per share narrowed to 2 cents from 5 cents a year ago, but was wider than analysts’ expectation of a 1-cent loss.
Peers Estee Lauder and Elf Beauty recently forecast a stronger year ahead on steady demand for beauty products.
Coty, which did not provide annual forecasts, expects like-for-like revenue in the current quarter to decline by a low- to mid-single-digit percentage, compared with an 8% drop last year.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Leroy Leo)
Comments