Kab cosmetics said on Wednesday that its annual earnings will be reduced by a whopping 6.6% as it restructures the makeup and skincaria departments, with Kylie Cosmetics becoming the largest customer of the cosmetics company.
Kylie said it will also slash its annual revenue by 4.7% in the year through December.
In March, Kab announced it was reducing its annual sales by 6% and laying off 200 employees.
Its net profit was $2.9 billion for the year ended March 31.
The cosmetics company said in March that its first-quarter sales would drop 1.4% to $1.4 billion, but its second-quarter will be a record-setting quarter as it reported the second-highest quarterly revenue of all major cosmetics companies.
Kab said that its sales of the cosmetic and fragrance products will also increase by 1.8% in 2016.
The company said it expects to report its full year results on June 25.
Kab Cosmetics said it aims to expand its business into other areas in the future, and said it intends to increase its gross margin by 20-30%.
“The company believes that the restructuring process will be completed in the second half of the year and we expect to see an increase in operating profit and profitability in the fourth quarter,” Kab said.
The makeup and cosmetics business was already suffering from weak sales and poor profit margins as it faced a tough challenge to revive sales of its high-end cosmetics and fragrance brands.
In 2015, Kab Cosms announced it would discontinue the makeup brands Lancôme, L’Oreal, and L’Oréal.
That followed a similar decision by L’oreal Cosmetics in November that it would lay off 200 workers.
Kyles Cosmetics has also struggled to compete in the market due to poor performance from its high end cosmetics and its inability to provide a full-service, well-known beauty brand.
The Kab Cosmies said it plans to cut 1,400 employees and consolidate its makeup and fragrance operations.
The restructuring is expected to cost the company $3 billion in 2017.
Kab has also faced criticism for its treatment of its workers, who have suffered from poor working conditions and long hours.
The cosmetic brand is one of the biggest cosmetics companies in the world and has more than 1,500 stores and a global network of distribution centers.