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New York - Coty, the seller of Calvin Klein fragrance and Rimmel makeup, reported fourth-quarter profit that exceeded analysts’ estimates, helped by acquisitions and higher sales of its core cosmetics brands.
Profit was 13 cents a share, excluding some items, in the period ended June 30, the New York-based company said in a statement Tuesday. Analysts projected 6c, on average. Sales were $1.08bn, topping the average estimate of $1.05bn.
Coty is working to integrate more than 40 Procter & Gamble beauty brands, including Gucci fragrances, CoverGirl cosmetics and Max Factor makeup. The company’s $12.5bn deal with P&G, announced in July 2015, is expected to turn Coty into the world’s third-largest cosmetics company when it closes in October. The company then plans to divest a number of brands so it can focus on the key names.
“The very strong focus that we will have in the new organisation behind few categories and channels of distribution will help us to be more competitive in the market place,” Bart Becht, chairperson and interim chief executive officer, said in an interview on Tuesday. Gucci and Marc Jacobs are among the brands that the company will prioritize, he said.
Coty rose 0.9% to $30.03 at 15:53. The shares gained 16% this year through Monday.
The company said it has a target of returning net revenue at the businesses it currently owns to growth in the second half of the fiscal year, excluding the effects of currency-exchange rates.
In July, Coty promoted Camillo Pane, formerly a vice president for category development, to the job of CEO. Staffing related to the P&G deal is “pretty much complete,” and the company is on track to complete the acquisition in October, Becht said.
Coty also agreed to buy the personal-care and beauty division of Brazil’s Hypermarcas in November and completed a deal for the Bourjois cosmetics brand last year. The purchases, combined with launches of new fragrances and cosmetics, will continue to help performance this year, Becht said.
