Beauty products maker Coty Inc today posted better-than-expected quarterly results, selling more of a range of luxury perfumes which include Burberry and Gucci brands.
Once a pure-play fragrance maker, Coty has diversified by acquiring a slew of established brands and adding hair appliances and Younique makeup to its portfolio of products to attract younger customers.
Powered by strong growth in designer brands including Chloe and Tiffany & Co, sales in its luxury beauty segment climbed 19% to $752.5 million in the third quarter ended March 31.
Shares in the company rose 6.3% to $16.90 in response to the results.
Chief executive officer Camillo Pane told Reuters that prior to the relaunch of a series of its products in January this year, sales of its CoverGirl makeup and skincare faced double-digit declines. Wednesday's results showed a low single-digit percentage fall.
"The overall Clairol business is not showing big signs of improvement," said Pane, as it faces a stagnant beauty market in the U.S. and competition from L’Oreal and ELF Cosmetics.
Pane said he expects modest organic net revenue growth in the second half of 2018.
Net loss attributable to Coty Inc narrowed to $77 million or 10 cents per share, from a loss of $164.2 million or 22 cents per share, a year earlier.
Coty reported a drop of about 73% in restructuring costs in the quarter.
Excluding certain items, the company earned 13 cents per share, beating analysts' average estimate by 1 cent, according to Thomson Reuters I/B/E/S.
Sales rose 9.4% to $2.22 billion, beating analysts' estimate of $2.17 billion.