CoverGirl parent Coty estimates first-quarter sales below forecast

(Reuters) -CoverGirl parent Coty (NYSE:COTY) on Monday estimated first-quarter like-for-like sales growth below its prior forecast due to a slowdown in the U.S., sending its shares down 6% in after-market trading.

The cosmetics maker projected sales growth on a like-for-like (LFL) basis of between 4% and 5% for the three months ended September, compared to 6% it previously forecast.

Coty said very tight order and inventory management by retailers resulted in weakness in certain markets such as the U.S., Australia and China.

The company and rivals including Estee Lauder (NYSE:EL) and L’Oreal have signaled strained consumer spending for beauty and cosmetics products, widely considered an affordable luxury and recession-proof.

Coty now expects second-quarter LFL sales to grow moderately with some acceleration in the second half of the year.

The company said it was re-accelerating its cost-reduction efforts to deliver savings well above the initial target of about $75 million in fiscal 2025 in anticipation of “a more uncertain demand backdrop, including cautious retailer behavior and a complex macroeconomic environment.”

The company, which maintained its annual core profit target, will report first-quarter results on Nov. 6.