Coty Inc reported a wider quarterly loss, hurt by a $3 billion writedown in value of its consumer beauty brands, a part of the cosmetics maker's restructuring plan to turn around the business.
The company said in July that it would write down value of brands acquired from Procter & Gamble Co in 2016, in absence of recent growth.
The makeup and fragrance maker has been struggling for shelf space for its consumer products, as retailers stock up trendier, popular brands like NYX, Winky Lux and ColourPop. These brands are promoted through Instagram and are a rage among millennials.
Revenue from consumer beauty segment fell 15.2% to $902.4 million in the fourth quarter ended 30 June.
Expected Growth
The company said it expects fiscal 2020 earnings to grow by mid-single digits. The Wall Street is projecting annual earnings of 68 cents, or a growth of 5.8%, according to IBES data from Refinitiv.
Net loss attributable to the company widened to $2.80 billion, or $3.72 per share, in the reported quarter, from $181.3 million, or 24 cents per share, a year earlier.
Excluding certain items, Coty earned 16 cents, in line with analysts' average estimate.
Net revenue slipped to $2.12 billion from $2.30 billion a year earlier. Analysts were expecting $2.11 billion, according to IBES data from Refinitiv.
Coty also said it ended its partnership with online cosmetics retailer Younique LLC, a business it bought a 60% stake in 2017.
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