* Third-qtr adj earnings $0.12/share vs est. $0.09
* Fragrance sales rise 4 pct, skin and body care sales up 8
* Color cosmetics sales fall 6 pct
* Says current-quarter sales to remain flat
(Adds outlook, details on Avon, TJoy business, share price)
May 14 Perfume and cosmetics maker Coty Inc
reported a better-than-expected adjusted profit, helped
by growth in its fragrance and skincare business, primarily in
Europe and emerging markets.
Coty said it expected sales in the current quarter to be
flat compared with the same period in 2013, when it had sales of
$1.06 billion, as North American demand remains weak.
The U.S. business was hurt in the quarter ended March 31 as
middle-income consumers cut back on discretionary purchases such
as the nail category including the Sally Hansen brand.
While revenue in Europe, Middle East and Africa and Asia
Pacific rose, revenue from the United States fell 11.3 percent.
Net revenue rose 1 percent to $1.01 billion.
Sales of fragrances, Coty's largest business, rose 4
percent, helped by strong demand for brands such as Calvin
Klein, Davidoff, Marc Jacobs and Playboy.
Skin and body care division sales rose 8 percent while those
of color cosmetics fell 6 percent hurt by low demand of the nail
category in the United States.
Coty gets most of its revenue from perfume brands such as
Calvin Klein as well as those it sells under the names of
celebrities such as Beyonce Knowles, Lady Gaga and Jennifer
The company also said it entered into an agreement with Avon
Products Inc to market its select fragrances through
Avon Brazil's network of 1.5 million independent sales
The company, whose competitors include Estee Lauder Cos Inc
, L'Oreal SA and Elizabeth Arden Inc,
did not name the fragrances it would market.
Brazil, Avon's largest market, is also the largest fragrance
market globally, Coty said in a statement.
Coty reported a net loss of $253.3 million, or 66 cents per
share, in the third quarter, compared with a profit of $20.4
million, or 5 cents per share, a year earlier.
The company recorded a non-cash asset impairment charge
of$316.9 million after its efforts to revamp its TJoy business
in China did not produce expected cash flows.
Coty acquired TJoy Holdings, which makes ginseng-based
skin-whitening and anti-aging creams, in December 2010. The
company is based in Suzhou, in East China's Jiangsu province.
Excluding a tax benefit of 10 cents per share, Coty earned a
profit of 12 cents per share, beating the average analyst
estimate by 3 cents, according to Thomson Reuters I/B/E/S.
New York-based Coty's shares were up marginally in premarket
trading. They closed at $15.44 on the New York Stock Exchange on
(Reporting by Shailaja Sharma in Bangalore; Editing by Simon
Jennings and Don Sebastian)