text: Coty Stumbles Amid Supply-Chain Disruptions - WSJ
  https://www.wsj.com/articles/coty-stumbles-amid-supply-chain-disruptions-1541614607
  Sales fall 9.2% as beauty firm tries to streamline operations after $12 billion purchase of P&G brands
  Sales at Coty's consumer beauty division, the home of mass brands including CoverGirl, declined 21% in the company's fiscal first quarter. Photo: mike blake/Reuters
  Coty Inc. COTY 0.18% 's sales declined further in the latest quarter, dragged down by disruptions in the company's supply chain and weakness at its consumer beauty division.
  Sales fell about 9.2% in the fiscal first quarter because of complications with Coty's continuing efforts to consolidate distribution centers, the company said, as well as an unexpected product shortage at key suppliers and interruptions to manufacturing caused by Hurricane Florence.
  Together, these supply-chain-related hurdles led to a decline of $100 million in sales and $60 million of operating profit, the beauty-products company said.
  Shares were down 22% Wednesday afternoon at $8.75.
  Coty is trying to streamline its supply-chain system and complete the integration of its $12 billion acquisition of beauty brands from Procter & Gamble Co. PG -0.37% in 2016.
  "If I look at Coty now and if I look at Coty before the merger, it's been a big upgrade," said Chief Executive Camillo Pane. He said Coty expects the supply-chain problems to be temporary and that the company will be better positioned for long-term growth after implementing comprehensive changes.
  Still, the performance of Coty's consumer beauty division, which houses mass brands such as CoverGirl, Clairol and Sally Hansen, also weighed down the company. The consumer beauty division's sales fell 21% in the latest quarter.
  "We're conscious of the fact that it requires a strong effort for a turnaround," Mr. Pane said. Coty is examining the entire portfolio with the goal of allocating investments toward brands with higher growth potential, he said.
  Sales in the luxury unit increased 3.7%, while the professional beauty segment's sales dropped 4.9%. When excluding effects of supply-chain issues, the luxury and professional beauty divisions would have grown by a mid-single-digit percentage and a low single-digit percentage, respectively.
  The New York company acquired 43 beauty brands from P&G in 2016, an ambitious move to beef up its scale. The integration is about 80% finished and is expected to be completed by fiscal 2019. Over the past two years, Coty has closed three factories and restructured a fourth one in addition to consolidating distribution centers and planning locations. The company is also looking for a new chief financial officer and expects to complete that search process soon.
  Total sales were $2 billion in the latest quarter, down from $2.24 billion in the same period a year earlier.
  Net debt widened to $7.6 billion, while net loss was $12.1 million during the fiscal first quarter. Separately, Coty declared a dividend of 12.5 cents.
  Coty's supply-chain hurdles led to a decline of $100 million in sales and $60 million of operating profit