Coty Inc. (NYSE:COTY) Q1 2020 Earnings Conference Call - Final Transcript
Nov 06, 2019 • 08:00 am ET
Good morning, ladies and gentlemen. My name is Maria, and I'll be your conference operator today. At this time, I would like to welcome everyone to Coty's First Quarter Fiscal 2020 Results Conference Call. [Operator Instructions]On today's call are Pierre Laubies, Chief Executive Officer, and Pierre-Andre Terisse, Chief Financial Officer.
I would like to remind you that many of the comments today may contain forward-looking statements. Please refer to Coty's earnings release and the reports filed with the SEC where the company lists factors that could cause actual results to differ materially from these forward-looking statements. All commentary on like-for-like net revenue reflect the comparison of the business at constant currency in the current and prior year excluding the impact of acquisitions and divestitures.
In addition, except where noted, the discussion of our financial results and our expectations reflect certain adjustments as specified in the non-GAAP financial measures section of our earnings release. You can find the bridge from GAAP to non-GAAP results in the reconciliation tables in the earnings release.
I will now turn the call over to Mr. Laubies.
Thank you, Maria. And welcome everybody to Coty's first quarter fiscal '20 conference call. I will start by reviewing the progresses we have made on our turnaround plan in the last few months and Pierre-Andre will then discuss our financial results, outlook and some of the recent strategic developments. Our Q1 can be characterized by several key developments. First, we have begun activating our turnaround plan announced on July 1. Second, our operational and financial results, it is straight that we are off to a solid start for the year and that we are showing improvement on the parameters that we seek to dive. And third, we remain confident in the fiscal '20 targets we laid out on the last earnings call. As a reminder, we did our turnaround plan aimed at solving what we consider our most pressing issues. More specifically, where we are talking of the need to redress the trajectory of our consumer beauty business, retain the high performance levels of our luxury and professional beauty businesses, close our margin gap against our peers, reconcile our organizational design and our size, and build an engaging culture relying less on personnel genius and more on collective mastery.
Four months into the activation of our plan, we are tackling each of these areas, one by one. To begin stabilizing our clients in Consumer Beauty, we have been refocusing our teams on the most pressing fundamentals, namely our working media strategies. In Q1, working media spend increased 11% with the biggest step up behind Consumer Beauty lines. Within Consumer Beauty, we are actively focusing our resources behind our priority brand-country combinations, leading to an investment increase of close to 40% on these strategic 40% on the strategic priorities. We are also returning, as you may have noticed with the recent announcement on CoverGirl to a marketing strategy altered on our strongest distinctive brand assets. We are also beginning to address