Coty, Inc. (COTY) Misses Q4 EPS by 2c

Coty, Inc. (NYSE: COTY) reported Q4 EPS of $0.03, $0.02 worse than the analyst estimate of $0.05. Revenue for the quarter came in at $1.04 billion versus the consensus estimate of $1.06 billion.

Commenting on the Company's performance, Michele Scannavini, CEO of Coty Inc., said, "In fiscal 2014 Coty made good progress on its strategic objectives by rapidly expanding its business in emerging markets and growing most of its power brands. As a result, the company enjoyed strong performance in EMEA and Asia Pacific, which was more than offset by revenues softness in North America, where our nail and fragrance businesses were impacted by market contraction, trade de-stocking and increased promotional and competitive pressure, mainly in the mass channel.

As we look to fiscal 2015, we are targeting to return to revenue growth, through competitive innovations, continuous expansion in the emerging markets and by improving our mass business in North America. The implementation of our global efficiency plan, which is expected to generate over $200 million in annual savings within the next three years, should further contribute to fuel our growth and expand our margins."

Outlook for Fiscal 2015

Coty is targeting to return to revenue growth in fiscal 2015 through a competitive innovation program, continuous expansion of the emerging market business, and the progressive recovery in the nail business in North America. The Company is targeting modest growth in the first half in light of the challenging market conditions. Coty will also continue executing its share repurchase program, with $300 million remaining under the current authorization.

Other noteworthy Company developments:

Coty is strengthening its focus on eliminating non-value added costs and optimizing purchase terms with a global efficiency program whose main pillars are:

- New organizational design and simplified operating model, announced on July 9th

- Rationalization of the go-to-market and supply structure in China, announced on June 3rd

- Global supply chain productivity and footprint simplification

- Acceleration of central procurement efficiencies, particularly on indirect spending

The global efficiency program is expected to deliver annual savings of over $200 million within the next three years, with pre-tax charges of $250 to $300 million. The anticipated savings and costs associated with the global efficiency program include the previously announced Productivity Program and the China mass channel business reorganization.

In an effort to increase flexibility in Coty's capital structure to support its growth plans, Coty intends to prepay its 2010 Private Placement Notes. The Company intends to borrow a new term loan to prepay the notes, with the intent to refinance the new term loan and other existing bank debt with longer term debt instruments later this fiscal year.

For earnings history and earnings-related data on Coty, Inc. (COTY) click here.

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