Coty Inc (COTY) saw its loss widen to $164.20 million, or $0.22 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $26.80 million, or $0.08 a share. On the other hand, adjusted net income for the quarter stood at $110.30 million, or $0.15 a share compared with $47.80 million or $0.14 a share, a year ago. Revenue during the quarter surged 113.75 percent to $2,032.10 million from $950.70 million in the previous year period. Gross margin for the quarter contracted 135 basis points over the previous year period to 59.84 percent. Operating margin for the quarter stood at negative 9.47 percent as compared to a positive 2.42 percent for the previous year period.
Operating loss for the quarter was $192.50 million, compared with an operating income of $23 million in the previous year period.
However, the adjusted operating income for the quarter stood at $208.30 million compared to $102.60 million in the prior year period. At the same time, adjusted operating margin contracted 54 basis points in the quarter to 10.25 percent from 10.79 percent in the last year period.
Commenting on Q3 financial results and strategic outlook, Camillo Pane, Coty CEO said: “Q3 was a better quarter. The underlying net revenue trend, excluding the contributions from ghd, Younique and one month of the Brazil Acquisition, improved sequentially to -2% at constant currency compared to a high single digit decline in the first half. This improvement was driven by good growth performance in the Luxury division, flat performance in Professional Beauty, and some improvement but continued negative performance in the Consumer Beauty division.
Operating cash flow improves significantly
Coty Inc has generated cash of $706.70 million from operating activities during the nine month period, up 58.70 percent or $261.40 million, when compared with the last year period. The company has spent $1,056.10 million cash to meet investing activities during the nine month period as against cash outgo of $1,042 million in the last year period.
Cash flow from financing activities was $781.10 million for the nine month period, up 25.64 percent or $159.40 million, when compared with the last year period.
Cash and cash equivalents stood at $767 million as on Mar. 31, 2017, up 109.22 percent or $400.40 million from $366.60 million on Mar. 31, 2016.
Working capital increases sharply
Coty Inc has recorded an increase in the working capital over the last year. It stood at $488.50 million as at Mar. 31, 2017, up 189.22 percent or $319.60 million from $168.90 million on Mar. 31, 2016. Current ratio was at 1.15 as on Mar. 31, 2017, up from 1.10 on Mar. 31, 2016.
Cash conversion cycle (CCC) has increased to 20 days for the quarter from 4 days for the last year period. Days sales outstanding went down to 46 days for the quarter compared with 65 days for the same period last year.
Days inventory outstanding has decreased to 57 days for the quarter compared with 134 days for the previous year period. At the same time, days payable outstanding went down to 123 days for the quarter from 195 for the same period last year.
Debt increases substantially
Coty Inc has witnessed an increase in total debt over the last one year. It stood at $7,102.30 million as on Mar. 31, 2017, up 71.95 percent or $2,971.80 million from $4,130.50 million on Mar. 31, 2016. Total debt was 31.19 percent of total assets as on Mar. 31, 2017, compared with 58.80 percent on Mar. 31, 2016. Debt to equity ratio was at 0.74 as on Mar. 31, 2017, down from 9.08 as on Mar. 31, 2016. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
