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Mar 31, 2020
Coty Q3 2020 Earnings Report
Coty's Q3 2020 earnings were impacted by COVID-19, with revenue declining 23.2% and adjusted operating income at $0.1 million. The company announced a strategic partnership with KKR and a plan to reduce fixed costs by $700 million.
Key Takeaways
Coty's Q3 fiscal results revealed a 23.2% decrease in net revenue, with a 19.5% organic LFL decline, impacted by COVID-19. Adjusted operating income was $0.1 million, and the company announced a strategic partnership with KKR, including a $750 million investment and plans to reduce fixed costs by $700 million.
Net revenue decreased by 23.2%, with a 19.5% organic LFL decline due to COVID-19 impacts.
Adjusted operating income was $0.1 million, significantly down due to operating deleverage.
Secured a holiday on leverage covenant for the next 4 quarters.
Announced a plan to reduce fixed costs by $700 million over the next 30 months.
Revenue by Geographic Location
Forward Guidance
Coty is targeting operating margins in the mid-teens by FY23, assuming the successful completion of the KKR partnership and the expanded $700 million fixed cost reduction program.
Positive Outlook
- Expanded $700 million fixed cost reduction program to enhance competitiveness.
- Targeting operating margins in the mid-teens by FY23.
- Strategic partnership with KKR expected to strengthen the balance sheet.
- KKR investment to position the company for long-term growth.
- Focus on deleveraging the balance sheet.
Challenges Ahead
- Uncertainty related to the completion of the KKR partnership.
- Impact of COVID-19 on demand for products.
- Potential disruptions in operations and supply chain.
- Global economic uncertainties.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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