Coty (COTY) 2Q16 Results: Sales Beat as Demand for Cosmetics Rises

Executive Summary

• Coty reported 2Q16 revenues of $1.21 billion, representing a 1% like-for-like decline from the year-ago quarter but topping consensus expectations of $1.20 billion.
• The beauty products maker recorded diluted non-GAAP EPS of $0.38 versus consensus of $0.34.
• Revenues were driven by the Color Cosmetics business, which rose by 3% like for like, marking the division’s third straight quarterly increase. Growth was driven by the Rimmel and Sally Hansen power brands.
• Coty confirmed the acquisition of 10 Procter & Gamble (P&G) fragrance licenses, including Hugo Boss, Gucci and Lacoste, and said it is on track to close in the second half of 2016. Management indicated that a 29% decrease in quarterly net income was tied to costs of $45.5 million in relation to its P&G acquisition.