Coty, a decline for 2014

By

Sarah Ahssen

Published
Aug 31, 2014

For its 2014 fiscal year, ending on June 30, the perfume company Coty has recorded sales of 3.5 billion euros (4.6 billion), down 2.5% at constant exchange rates (-1.6% on a like-for-like basis).

The decline is primarily due to the poor performance of its "Color Cosmetics" segment, sales of which were down 7% to 1.06 billion euros. The segment (Rimmel, Sally Hansen...) suffered from a decline in the popularity of its nail polish in North America.

Its “Fragrances" segment, meanwhile, saw sales grow modestly by 1% to 1.9 billion euros, generated by Calvin Klein and Chloé fragrances among others, while perfume collaborations with Lady Gaga appear to have been less successful.

Its “Skin care and body" segment sales totaled 521 million euros, down 1% at constant exchange rates (1% on a like-for-like basis).

While its brands Philosophy, Adidas and Lancaster have performed well, their results have been offset by lower sales from TJoy.

In the Americas, Coty’s sales totaled 1.3 billion euros, down 10%, impacted by the poor performance of its fragrances and cosmetics on the US market.

Europe, the Middle East and Africa saw its sales grow by 2% to 1.7 billion euros, helped in particular by positive results in the UK and from its “travel retail” network.

Finally, sales in the Asia-Pacific recorded a 4% rise to 414 million euros - growth experienced in almost all the markets in the region.

For the full year, the company’s net loss amounted to 74 million euros, as compared with a net profit of 128 million euros a year earlier.

However, in the fourth quarter, the company reduced this loss to 15.2 million euros, as compared with a 47.3 million loss over the same period the year before. "As we look to fiscal 2015, we are targeting to return to revenue growth, through competitive innovations, continuous expansion in the emerging markets (...). The implementation of our global efficiency plan, which is expected to generate over 152 million euros (200 million dollars) in annual savings within the next three years, should further contribute to fuel our growth and expand our margins,” said Coty CEO Michele Scannavini.