A screen displays the logo and trading information for Coty Inc at the New York Stock Exchange (NYSE) in New York, U.S. (Photo : REUTERS/Brendan McDermid)
Coty Inc's biggest business that includes brands such as Burberry perfumes and Gucci foundations returned to growth in the third quarter after a tumultuous 2020, while the cosmetics maker's net loss narrowed sharply.
The company saw its sales plummet last year, as stuck-at-home consumers found little use for makeup. Coty is now tapping into pent-up demand for luxury beauty products in China and the United States to offset the declines.
Sales at the company's Prestige unit that makes Gucci lipstick and Philosophy skincare rose 6.5% to $600.6 million, the first rise in over a year.
Still, restrictions in certain parts of Europe, including UK and France, imposed to curb surging virus cases hampered demand for the company's products in the third quarter. Sales for the region fell 7.8%, while the Asia Pacific region, which includes China, rose nearly 28%.
"We are starting to see some improvement in the UK ... seeing lockdowns being lifted will hopefully help us build in the fourth quarter," Chief Executive Officer Sue Nabi told Reuters.
Coty is also hoping to mirror its success in China in the United States, as the country begins to reopen helped by speedy vaccine distributions.
"In the U.S., part of the business is still a little bit under pressure due to the mass business, but Prestige is growing," Nabi added.
The New York-based company's shares, which have gained nearly 50% so far this year, were down about 5% at $9.84 in premarket trade.
Coty's net revenue fell about 3% to $1.03 billion, in line with expectations, while the company broke even on profit.
Net loss attributable to common stockholders was $18.5 million in the quarter ended March 31, compared with a loss of $271.6 million a year earlier.
