Coty is back in the red in the second quarter of the year. The cosmetics and perfumery group has closed the period, ended on December 31, contracting sales by 16%. The company returned to a loss in the last three months of 2020.
The company had a turnover of 1,416 million dollars between October and December, compared to the 1,684 million dollars registered the previous year. For its part, the net result was in the red, with losses of $ 255 million. In the first quarter of the year, between July and September, Coty achieved profits of $ 200.6 million.
In the accumulated of the first six months, the group sank its sales by 18%, to 2,538 million dollars, compared to 3,095 million dollars registered in the same period of the previous year.
“Our strong second quarter results build on the momentum experienced in the first quarteras the entire organization continued to act with discipline, flexibility and creativity in an uncertain environment ”, said Sue Y. Nabi, Coty CEO. The executive has also indicated that the company’s business in China has been a great growth engine, as well as ecommerce, which soared 40% in the second quarter.
Coty soared its sales through the online channel by 40% in the second quarter
By markets, in Europe, the Middle East and Africa, the most important for the company by volume of business, sales plunged 22%, up to $ 709 million. Despite the second wave of the coronavirus, which affected the company’s business in several countries due to the closure of stores and mobility restrictions, sales remained in line with those registered in the first quarter.
In America, the company’s revenue fell 7.2% compared to the same period of 2019, to 540 million dollars. The company has assured that the fall was cushioned by the joint venture with Kylie Jenner, who posted stronger sales in the second quarter than in the first.
In Asia Pacific, on the other hand, billing fell by 13.9%, to $ 167 million. The fall in tourism and the blow to travel retail in the region had an impact on the company’s sales. Despite this, the evolution in China was positive both in physical stores and in the online channel.
The company is immersed in a strategic plan that will extend over several years
By category, Coty’s luxury business, which includes brands such as Calvin Klein, Chloé, Davidoff, Gucci, Hugo Boss or Kylie Skin, among others, recorded a drop of 11.1%, to $ 904 million. For its part, the consumer cosmetics business, which includes firms such as Max Factor, Rimmel and Adidas, experienced a 23.3% contraction, to $ 512 million.
Coty is immersed in a strategic plan by which it is implementing several changes in its business, such as greater control and cost reduction. As part of it, the company carried out a restructuring of its leadership in December, with several appointments for its cosmetics area.
Further, the company is accelerating its e-commerce, which in recent months has experienced a sales boom, and is strengthening its presence in the Chinese market. As part of its growth plans, Coty also plans to strengthen its fragrances, cosmetics and skincare deluxe.
The company has explained that In the coming months, it will continue to focus on strategic priorities to improve the pace of sales. “We will begin to increase our business investments to drive the recovery in fiscal 2022,” Coty said.
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