Coty Sharpens Focus in Response to COVID-19
Coty is taking steps to adjust its focus as it contends with effects from the new coronavirus.
The beauty brand is accelerating its e-commerce efforts as a response to the growing demand prompted by the pandemic. Amazon sales have nearly doubled in the United States in recent weeks, it said.
The company is also preparing for a post-COVID-19 increase in demand, beginning with Asia.
Coty is also taking a number of temporary and structural measures to adjust its expenses and protect cash flow. In light of the impact of COVID-19 on its business, the company expects net revenues for the third quarter of fiscal year 2020 to decline about 20%, with a meaningful impact on profit.
The company has recommended to its board of directors that shareholders be given the option to receive up to 100% of their quarterly dividend in kind for the coming two quarters.
Its largest shareholder, JAB, has notified Coty it will fully repay the loan it used to finance the tender offer in 2019.
The company continues to explore the sale of its professional division and said it has sufficient liquidity and headroom to meet its covenants based on management’s current view of market conditions.
Pierre Denis, formerly of Jimmy Choo, joined as Coty’s new CEO just earlier this month.
The company is No. 60 on CGT’s Top 100 Consumer Goods Companies of 2019.