Coty expects to post net profit in second half of 2019, shares surge
today Feb 8, 2019
Marc Jacobs perfume maker Coty Inc said on Friday it expects to post a net profit in the second half of fiscal 2019 and reported quarterly revenue and adjusted earnings that beat estimates, sending its shares up 20 percent.
In the second quarter, the company was helped by higher sales in its luxury segment, with strong holiday demand for the Gucci, Marc Jacobs and Burberry brands.
Net loss attributable to Coty was $960.6 million, or $1.28 per share, in the second quarter ended Dec. 31, compared with a profit of $109.2 million, or 15 cents per share, a year earlier, as the company incurred an asset impairment charge.
Coty has reported just one quarterly net profit in the past two years.
Excluding certain items, the company earned 24 cents per share, topping expectations of 22 cents.
“I must stress that while we are confident that we can return Coty to a path of sustainable growth, we are also realistic that it will take time to achieve this outcome,” Chief Executive Officer Pierre Laubies said in a statement.
The better-than-expected quarterly results overturn a slew of weak quarters at the Covergirl cosmetics maker, which has been battling declining traffic in its brick-and-mortar stores in the United States hurt by supply-chain issues.
Net revenue fell 4.8 percent to $2.51 billion, but beat expectations of $2.47 billion, according to IBES data from Refinitiv.
Shares of the company were up nearly 19 percent at $8.40 before the opening bell.
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