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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.
Coty
Coty
Coty Revenue by Geographic Location
Revenue by Geographic Location
Americas Revenue
CapyFin.comEMEA Revenue
CapyFin.comAsia Pacific Revenue
CapyFin.com 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.
- Currency exchange rate volatility.
Revenue & Expenses
Visualization of income flow from segment revenue to net income