Coty (COTY 17.63, -1.92) has tumbled 9.8% to its lowest level since late April, in response to disappointing earnings.
The manufacturer and marketer of fragrances and cosmetics reported breakeven earnings, which was below consensus expectations. Revenue jumped 108.4% year-over-year to $2.24 billion, exceeding expectations.
When excluding the positive contribution from the acquisitions of ghd, Younique, and seven months of contributions from Hypermarcas, organic net revenue declined 5.0%. Consumer Beauty organic revenue fell 10.0%, outweighing a 5.0% increase in Luxury organic revenue and a 3.0% increase in Beauty organic revenue.
Coty reported an operating loss of $279.00 million, driven by restructuring and acquisition related costs of $190.20 million and a $35.60 million increase in acquisition-related amortization expense. Adjusted operating income declined to $90.10 million from $94.20 million one year ago.
Adjusted gross margin improved to 62.4% from 60.4%.
Coty's management was pleased with the early results from the acquisitions of Hypermarcas, ghd, and Younique.
Looking at the geographic breakdown, combined revenue in North America increased 9.0% while revenue from Brazil, Middle East, and Australia rose 7.0%. European revenue declined 2.0%.