Coty Posts Surprise Q1 Profit as Online Sales Growth Doubles: Shares Surge

Coty said its e-commerce business doubled as a percentage of overall sales to 13%, helping it post a surprise first quarter profit while gaining market share in the U.S. and Europe.
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Coty Inc.  (COTY) - Get Report shares surged higher Friday after the luxury goods group posted a surprise first quarter profit as higher margin online sales helped offset a slide in overall revenues. 

Coty said adjusted earnings for the three months ending in September, the group's fiscal first quarter, came in at 11 cents per share, up 57% from last year and well ahead of the Street consensus forecast of a 5 cents per share loss. Group revenues, Coty said, fell 13% to $1.69 billion, but that tally was also well ahead of analysts' estimates of $1.07 billion. 

Coty said e-commerce penetration as a percentage of overall sales doubled from last year to 13%, helping to gain market share in prestige fragrances in the U.S. and Europe while helping stabilize its U.S. share of the cosmetics market.

"Our first quarter results are a testament that a stronger, more focused and more flexible Coty, is emerging in the middle of the COVID-19 pandemic and better prepared to face any future market disruptions," said CEO Sue Nabi. "Impressively, the organization has continued to adapt to the new normal, executing on our financial and operational priorities, including profit and cash flow protection, strong innovation performance, e-commerce momentum, and strengthened positioning in core markets."

"We remain focused on diligent cost control and delivering on our FY21 financial commitments, including being profitable on an adjusted operating income basis for Continuing Operations and being cash positive for the year, supporting improved like-for-like Financial Net Debt," she added. 

Coty shares were marked 21.4% higher in early trading immediately following the earnings release to change hands at $4.07 each.