Can Kylie Jenner Beautify Coty's Bottom Line?
After sustaining a stock market drubbing throughout much of 2018 and into early 2019, Coty, Inc. (NYSE: COTY) seems to be catching its breath -- and heading into the early stages of a rebound -- thanks to its recently implemented turnaround plan. Its Luxury Division is providing good returns, compensating for the Consumer Division's rather wobbly performance. Now, Coty has announced a deal to acquire a controlling interest in the Kylie Beauty celebrity brand, in a bold but possibly risky move to access the as-yet-untapped Generation Z cosmetics market.
During 2018, Coty's performance slumped and its stock market performance followed suit. Weighed down by a pricey acquisition and a weak e-commerce presence, in January 2019 the company appointed a new CFO, a Chief Global Supply Officer, and a COO for the Consumer Beauty Division to set itself back on the path to growth.
Company leadership developed a turnaround plan to centralize management, invest in its most successful brands, optimize its supply chain to cut costs, and restructure itself to remove bureaucracy. By 2023, Coty's plan aims to pay down debt, boost cash flow to approximately $1 billion, and reach an operating margin of 14% to 16%.
Source Fool.com
