Coty has announced its third quarter 2021 results that reported net revenues were $1.02 billion, a decline of 3.3% year-over-year. Net revenues for the nine months ended March 31, 2021, were $3.56 billion, a 14.2% decrease year-over-year.
Adjusted operating income increased to $95.6 million from an adjusted operating loss of $68.2 million in Q3.
Coty reported a Q3 gross margin of 61.9%, an increase from 56.6% in the previous year. The nine-month period reported gross margin of 59.6%, a decrease from 60.2% in the previous year.
In Q3, Coty also reported an operating loss of $1.4 million, improved from an operating loss of $299.5 million in the previous year. The nine-month period reported its operating loss was $50.4 million, an improvement from an operating loss of $316.0 million.
Net loss for Q3 was reported at $1.2 million, an improvement from a net loss of $311.0 million in previous year. The nine-month period reported a net loss of $54.8 million, improved from a net loss of $404.2 million in the previous year.
The nine-month period reported an adjusted net income of $76.8 million, an improvement from an adjusted net loss of $11.0 million in the previous year.
Coty reported Q3 net revenues for prestige beauty of $600.6 million, or 58.4% of Coty sales. The nine-month period reported net revenues of $2.14 billion, as compared to $2.38 billion the previous year.
Coty reported Q3 net revenues of $427.4 million, of 41.6% of Coty continuing operations. The nine-month period reported net revenues of $1.41 billion, as compared to $1.77 billion the previous year.
Sue Y. Nabi, Coty's CEO, said:
Our Q3 marked another strong milestone in our journey to rejuvenate Coty's position as a global beauty powerhouse. In less than a year, the leadership team and the broader organization have successfully mapped out our strategy, activated our brand and category plans, while generating operational improvements, and strengthening our financial position.
From a results standpoint, in Q3 we saw a significant improvement in our sales trends even as we continued our efforts to strengthen the health of our business and brands by cutting sales in low quality channels. Importantly, the prestige sales returned to growth as the impact of the pandemic abated in many markets.
We have seen strong momentum in several of our key markets, with China sales growing double-to-triple digits versus FY20 and FY19, and U.S. prestige sales up high single digits in the quarter and nearly flat in the fiscal year-to-date. While Europe sales remain under pressure, we are confident that the imminent lifting of COVID restrictions will drive improvement in this key region. Financially, we took a significant step forward in reshaping our profitability profile, with gross margins over 62% and EBITDA margins up 18 percentage points year-on-year, despite a lower topline. With our year-to-date adjusted EBITDA of $633 million reaching over 80% of our FY21 target of approximately $750 million, we have generated capacity to significantly increase our marketing investments in Q4 to support our strategic growth initiatives while at the same time delivering on our financial commitments. We are also progressing on our deleveraging objectives, driving leverage towards 5x exiting CY21, and the recent successful $900 million bond issuance has helped Coty's maturity profile.
Finally, we were pleased to recently share our strategy for accelerating sales and profit growth in the coming years, anchored in six strategic pillars: 1) stabilization of consumer beauty make-up brands and mass fragrances; 2) acceleration of luxury fragrances and establishing Coty as a key player in prestige makeup; 3) building a skin care
portfolio across prestige and mass channels; 4) enhancing e-commerce and direct-to-consumer (DTC) capabilities; 5) expanding in China through prestige and select consumer beauty brands; and 6) establishing Coty as an industry leader in sustainability.
With this clear path towards value creation, a strong portfolio of desirable beauty brands, and a renewed sense of tempo throughout the organization, I am confident in Coty's ability deliver on its near and long-term objectives.