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Will Coty Benefit from Calvin Klein's Celebrity Endorsement?
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Coty Inc.’s (COTY - Free Report) division Calvin Klein Fragrances along with Calvin Klein, Inc, jointly announced a new advertising campaign for ETERNITY brand. The campaign will feature actor Jake Gyllenhaal as its new face. Calvin Klein, is a wholly owned subsidiary of PVH Corp (PVH - Free Report) . Coty acquired the licensing agreement for Calvin Klein’s fragrance line from Unilever in 2005.
The veteran actor has been a part of many successful movies such as Brokeback Mountain, Stronger and Nocturnal Animals. The new campaign also stars Liya Kebede, a leading model and advocate. The celebrities would be a part of ETERNITY’s television and print advertising campaigns. The campaign highlights Calvin Klein’s ideologies of contemporary life such as commitment, intimacy and love.
Celebrity endorsements for marketing beauty products have been quite popular, as it aids increasing acceptance of the brand, more effectively amongst teenagers. Coty, one of the pioneering companies in the beauty industry, along with peers such as Estée Lauder Companies Inc (EL - Free Report) and L’Oréal (LRLCY - Free Report) , has been utilizing celebrity power to endorse many products. For instance, advertising campaigns for Coty’s Rimmel lipsticks and other color cosmetics line features Kate Moss and Georgia May Jagge. Similarly, Beyoncé Knowles, Enrique Iglesias and David Beckham are other well-known celebrities who have endorsed Coty’s iconic brand line up.
Other Brand Strengthening Initiatives by Coty
Coty continuously evaluates strategic acquisitions and new brand licenses to enhance its portfolio. The company consistently introduces new products in response to shifting consumer preferences and markets new as well as established products through strategic advertising and merchandising. Moreover, the product launches made in the third quarter of fiscal 2017 including Hugo Iced and Boss Tonic, Chloe Love Story Eau Sensuelle and Miu Miu L'Eau Bleue proved to be beneficial and have yielded results in the fourth quarter. In addition, Gucci Guilty Absolute, which was launched in the end of March 2017, also witnessed strong growth.
Further, the company is repositioning some of the brands, including COVERGIRL, Max Factor and Sally Hansen, in order to reconnect these brands with consumers. Coty also seeks to divest non-performing brands in order to focus and utilize resources in other attractive opportunities. This includes investing in Professional Beauty segment and Luxury segment, which have been depicting strong growth.
Headwinds Pulling Down Shares
Coty’s acquisitions, product launches and licensing agreements have led to higher marketing spending and increased operating expenses, which have been affecting the company’s profits. Moreover, the new celebrity endorsement campaign for ETERNITY Calvin Klein is expected to further raise marketing spends for Coty.
Moreover, weak market trends across several of its categories, especially in North America and some reduction of shelf space for a few brands like Astor have weakened the company’s Consumer Beauty segment over the last few quarters. While the new marketing campaign for ETERNITY is expected to enhance Coty’s revenues in the Luxury segment, it may not be sufficient to counter the weakness in Consumer Beauty division.
As a result of such headwinds, shares of Coty have underperformed the industry in the past 12 months. In the said time frame, Coty’s shares declined 32.8% as compared with the industry’s fall of 10.1%. Ahead of the company’s first-quarter fiscal 2018 results, estimates for the same have also declined by 18 cents in the past 60 days.
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Image: Bigstock
Will Coty Benefit from Calvin Klein's Celebrity Endorsement?
Coty Inc.’s (COTY - Free Report) division Calvin Klein Fragrances along with Calvin Klein, Inc, jointly announced a new advertising campaign for ETERNITY brand. The campaign will feature actor Jake Gyllenhaal as its new face. Calvin Klein, is a wholly owned subsidiary of PVH Corp (PVH - Free Report) . Coty acquired the licensing agreement for Calvin Klein’s fragrance line from Unilever in 2005.
The veteran actor has been a part of many successful movies such as Brokeback Mountain, Stronger and Nocturnal Animals. The new campaign also stars Liya Kebede, a leading model and advocate. The celebrities would be a part of ETERNITY’s television and print advertising campaigns. The campaign highlights Calvin Klein’s ideologies of contemporary life such as commitment, intimacy and love.
Celebrity endorsements for marketing beauty products have been quite popular, as it aids increasing acceptance of the brand, more effectively amongst teenagers. Coty, one of the pioneering companies in the beauty industry, along with peers such as Estée Lauder Companies Inc (EL - Free Report) and L’Oréal (LRLCY - Free Report) , has been utilizing celebrity power to endorse many products. For instance, advertising campaigns for Coty’s Rimmel lipsticks and other color cosmetics line features Kate Moss and Georgia May Jagge. Similarly, Beyoncé Knowles, Enrique Iglesias and David Beckham are other well-known celebrities who have endorsed Coty’s iconic brand line up.
Other Brand Strengthening Initiatives by Coty
Coty continuously evaluates strategic acquisitions and new brand licenses to enhance its portfolio. The company consistently introduces new products in response to shifting consumer preferences and markets new as well as established products through strategic advertising and merchandising. Moreover, the product launches made in the third quarter of fiscal 2017 including Hugo Iced and Boss Tonic, Chloe Love Story Eau Sensuelle and Miu Miu L'Eau Bleue proved to be beneficial and have yielded results in the fourth quarter. In addition, Gucci Guilty Absolute, which was launched in the end of March 2017, also witnessed strong growth.
Further, the company is repositioning some of the brands, including COVERGIRL, Max Factor and Sally Hansen, in order to reconnect these brands with consumers. Coty also seeks to divest non-performing brands in order to focus and utilize resources in other attractive opportunities. This includes investing in Professional Beauty segment and Luxury segment, which have been depicting strong growth.
Headwinds Pulling Down Shares
Coty’s acquisitions, product launches and licensing agreements have led to higher marketing spending and increased operating expenses, which have been affecting the company’s profits. Moreover, the new celebrity endorsement campaign for ETERNITY Calvin Klein is expected to further raise marketing spends for Coty.
Moreover, weak market trends across several of its categories, especially in North America and some reduction of shelf space for a few brands like Astor have weakened the company’s Consumer Beauty segment over the last few quarters. While the new marketing campaign for ETERNITY is expected to enhance Coty’s revenues in the Luxury segment, it may not be sufficient to counter the weakness in Consumer Beauty division.
As a result of such headwinds, shares of Coty have underperformed the industry in the past 12 months. In the said time frame, Coty’s shares declined 32.8% as compared with the industry’s fall of 10.1%. Ahead of the company’s first-quarter fiscal 2018 results, estimates for the same have also declined by 18 cents in the past 60 days.
Coty currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Get the new Investing Guide now>>