MAV Beauty Brands dives into loss in Q3
Vaughan, Ontario-based personal care group MAV Beauty Brands Inc. reported a net loss of $103.1 million, or $2.81 per share, in the third quarter ended September 30, 2021, as goodwill impairment compounded the effect of stumbling sales. In the third quarter of the previous year, the company, which owns the Marc Anthony, Renpure, Cake Beauty and The Mane Choice brands, achieved net income of $3.6 million, or $0.10 per share.
In Q3 2021, MAV’s revenue totaled $24.7 million, a decrease of 22.1% compared to $31.7 million in the prior-year period.
In Canada and the U.S., the company’s revenue was $22.9 million, down 23.6% year over year from $30.0 million. This decline reflected the impact of net distribution decreases for two of the group’s brands, as well as the retailer inventory adjustments that followed.
MAV’s international segment saw year-over-year growth of 5.9%, reporting revenues of $1.8 million, but this progress was far from sufficient to effectively offset the company’s difficulties on its home market.
This slowdown was made worse by the fact that the beauty group recorded a non-cash charge of $129.0 million for impairment of goodwill in Q3 2021.
“We are disappointed with the Q3 financial results, including the non-cash goodwill impairment,” commented MAV Beauty Brands president and CEO Serge Jureidini in a release. “Third-quarter net sales decreased versus the prior year as we continued to experience the negative impact of net distribution losses from retailer planogram resets, as well as the subsequent customer inventory adjustments.”
Year to date, MAV reported sales of $82.5 million, down 11.1% from $92.8 million in the same nine-month period in the previous year. Net loss for the period was $97.5 million, or $2.65 per share, compared to income of $6.4 million, or $0.17 per share, last year.
Despite these declines, Jureidini struck an optimistic tone in his predictions for the company’s prospects moving forward.
“In a market that continues to show signs of recovery, we remain confident in the fundamental strengths of our business – the unique and complementary brand portfolio, the efficiency of a common operating platform, the team's expertise, and our entrepreneurial culture – as we strive to achieve improved and consistent results for our stakeholders,” said the CEO.
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