Coty Inc. on March 20 withdrew its financial guidance for fiscal 2020 as it expects a 20% year-over-year drop in third-quarter revenue, mainly due to the coronavirus outbreak.
The Covergirl, Rimmel and Maxfactor parent said the forecast drop in third-quarter like-for-like revenue is expected to have a meaningful impact on profit.
Coty said it will recommend to the board that shareholders be given the option to receive up to 100% of their 12.5 cent quarterly dividend in kind, instead of 50%, for the coming two quarters.
Coty added that the company’s largest shareholder, JAB Holdings BV, has decided to fully repay the loan it used to finance the tender offer to purchase 60% of Coty in 2019.
“We support management’s proposal to adjust the dividend in [the third and fourth quarters], and JAB will elect for full payment in shares,” JAB founding partner and Coty Chairman Peter Harf said in a statement.
To cope with the potential impact of the pandemic to its business, the beauty products maker said it has accelerated a number of initiatives including its e-commerce entry through Amazon.com Inc. Coty said sales in the U.S. nearly doubled in recent weeks. It also plans to launch Kylie skin care Europe in the coming weeks.
Coty said it is preparing for a surge in demand after the COVID-19 situation, starting in Asia.