HYPMY Hypera Sa (PK)

Coty Inc. reported Thursday its first-quarter profit soared, helped by a one-off tax benefit, and provided more details on the financing and organizational structure for its merger with Procter & Gamble Co.'s beauty brands.

The beauty-products maker said it has transferred 10 out of 12 fragrance licenses, putting it on track to close the deal in the second half of 2016.

Coty said its business will be reorganized around three divisions: luxury, consumer beauty and professional beauty. It will also launch a growth and digital department focused on top-line growth.

The New York company announced in September that it would buy P&G's beauty brands for $13 billion, adding items such as Clairol hair dyes and CoverGirl makeup to its portfolio.

Coty Interim Chief Executive Bart Becht acknowledged first-quarter results were mixed. He said strong profit showed success in Coty's global efficiency program, launched last year and designed to save at least $200 million annually.

"On the other hand, revenue growth wasn't where we would like it to be," he said in prepared remarks, pointing to declining fragrance revenue that has suffered from a large number of unsustainable historical launches.

"We will be working hard to clean up past portfolio practices," Becht said.

For the quarter ended in September, Coty reported a profit of $125.7 million, or 34 cents a share, up from $10.6 million, or 3 cents a share, a year earlier. Adjusted earnings were 59 cents a share compared with 28 cents a share the year before.

Revenue dipped 5.9% to $1.11 billion.

Analysts polled by Thomson Reuters had forecast earnings of 30 cents a share on $1.13 billion in revenue. Gross margin rose to 60.1% from 59.2%.

The latest quarter included a tax benefit of $67.1 million, compared with $5 million in the year-earlier quarter.

This week, Coty announced its acquisition of beauty and personal care business Hypermarcas . The move is expected to increase Coty's exposure to higher growth emerging markets over time, especially Brazil, and is the latest in a string of acquisitions that include nail-polish company OPI Products, skin-care-products brand Philosophy and digital marketing platform Beamly.

Shares, which closed Wednesday at $29.95, were inactive premarket.

Write to Anne Steele at Anne.Steele@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 05, 2015 08:45 ET (13:45 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.