Author Topic: COTY - Coty Inc  (Read 13715 times)

HalfMeasure

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Re: COTY - Coty Inc
« Reply #40 on: November 07, 2018, 12:09:52 PM »
Anyone still following this? The hits just keep coming


Saluki

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Re: COTY - Coty Inc
« Reply #41 on: November 07, 2018, 04:12:36 PM »
It got killed today, it looks like they are having some supply chain problems. This seemed like a story with two chapters to me, reducing costs through synergies (what merger hasn't promised that?) and growth of international markets like brazil etc.  I read through the 10-k when the merger happened, but I couldn't get comfortable with the profit potential vs the price. 
If it's important, do it every day. If it's not important, don't do it at all.  -Dan Gable

HalfMeasure

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Re: COTY - Coty Inc
« Reply #42 on: November 07, 2018, 05:02:49 PM »
It got killed today, it looks like they are having some supply chain problems. This seemed like a story with two chapters to me, reducing costs through synergies (what merger hasn't promised that?) and growth of international markets like brazil etc.  I read through the 10-k when the merger happened, but I couldn't get comfortable with the profit potential vs the price.

Was already down ~50% from its 52-week high, and the quarter was still bad enough to get this big of a puke. The market sure has soured on this situation fast. The supply chain problems seem transient, but given the string of issues it seems the market is having a hard time looking past it and believing in the story at this point. How do you feel about the price now?

CorpRaider

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Re: COTY - Coty Inc
« Reply #43 on: November 07, 2018, 05:34:24 PM »
I'm still long.  Was up 35%, now down 40%.  This was like the ELF inverse.  The merger has definitely not gone according to plan so far.  Most mergers do that.  I think I need more data to draw a conclusion.  Sounds like the supply chain issues were self inflicted, but I haven't listened to the call yet.  I liked that in the press release they were like we screwed this up and we don't know what the impact will be for the rest of the year yet.  I like the candor (re: lack of visibility) (it reminds me of a Munger example).  Still, I wonder if Pane will get the axe and Becht steps back in.    Still printing growth in the burberry, gucci, tiffany type stuff and the OPI/salon division.  They are mote likely to do rational stuff because it is "their money."
« Last Edit: November 08, 2018, 09:30:29 AM by CorpRaider »

Spekulatius

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Re: COTY - Coty Inc
« Reply #44 on: November 08, 2018, 06:57:11 PM »
Itís the first time I ever heard about a supply chain issue with a cosmetics/ beauty company. The gross margins are so high in cosmetics , that saving a few % in manufacturing cost canít really move the needle. A management that drives this so hard, seems inept to me and the stock reflects that Add the high debt load and you get a lot of gravity for the stock, They could do an Avon if they continue this path.
« Last Edit: November 09, 2018, 09:19:06 AM by Spekulatius »
To be a realist, one has to believe in miracles.

Peregrino

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Re: COTY - Coty Inc
« Reply #45 on: November 09, 2018, 06:28:07 AM »
What I find amazing is the continued talk from management about synergies.  As if anyone but the sell side bean counters cares at this point.  Screw the synergies, where'd the cash flow go!

They took company A with $4.3b in sales and $700m in EBITDA, combined it with company B which had $5b in sales and $1b in EBITDA.  Absent synergies, you should end up with a company with $9b+ in sales and $1.7b in EBITDA.  A+B=C

Instead, $400m of EBITDA has disappeared. 

If you believe the synergy malarky they keep peddling, then even more than $400m in EBITDA has disappeared. 

Gets worse on an EBIT basis, where they paid $12.9b for an incremental $150m in EBIT...

Personally, I got lulled into this one by JAB's involvement.  Only recently sold out my position at a quite compelling loss.

Frustrated as I am, I will probably keep following the company and may re-enter at some point because hope springs eternal.

Peregrino

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Re: COTY - Coty Inc
« Reply #46 on: November 12, 2018, 06:01:05 AM »
http://investors.coty.com/phoenix.zhtml?c=251569&p=irol-newsArticle&ID=2376686

Camilo Pane (CEO) leaving for "family reasons"...

NEW YORK--(BUSINESS WIRE)--Nov. 12, 2018-- Coty Inc. (NYSE: COTY) today announced the resignation of Camillo Pane, current CEO of Coty, for family reasons and the appointment of Pierre Laubies as the new CEO of Coty, effective immediately.

CorpRaider

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Re: COTY - Coty Inc
« Reply #47 on: November 12, 2018, 06:06:15 AM »
Yeah, not surprising.  I was sort of iffy about him in the first few calls.  Saw that Becht is going to cede the chairman role to Harf too.  Fresh eyes I suppose.

kab60

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Re: COTY - Coty Inc
« Reply #48 on: November 12, 2018, 06:45:43 AM »
I think I said it before in this thread but it always rubbed me the wrong way how they gave 2020 guidance a couple of years ago. Read the last conference call last night and it was a friggin' joke.

When I read this part it seemed inevitable that he'd be axed:

And regarding your question about the specific teams, we do, yes have specific teams that now are in Ė clearly looking at this planning process and the consolidation plan with the level of details and scrutiny that clearly we have never had before.

I mean, that's basically saying they did a huge buyout without really planning for it. Duh.

I think it's a bit interesting since they seem to have some strong brands and as long as revenue holds up (which it hasn't recently and last conference call doesn't exactly give one confidence) you'd expect them to eventually fix their problems. I mean, it shouldn't be that hard to earn a decent return when gross margins are plus 60 pct., but they completely blew their execution.

Even then, I don't think valuation is attractive enough considering the large execution risks, weakness in consumer beauty and the eventual cancellation of the dividend.

But I might be a bit too cheap and not fully grasp the attractiveness of the beauty space and its largely recession proof business model.

walkie518

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Re: COTY - Coty Inc
« Reply #49 on: November 12, 2018, 06:57:06 AM »
this is very, very bad

write-offs on recent acquisitions needed to right the ship?