Multinational beauty company Coty Inc (COTY) reported a bigger-than-expected decline in first-quarter sales, hurt by supply chain disruptions in Europe and the US. The CoverGirl cosmetics maker said the declines were mainly due to the streamlining of distribution centers in both these regions.
Shares of the company plunged 24% during intra-day trading on Wednesday.
Net loss attributable to the company shrunk to $12.1 million in the first quarter as revenues fell 9.2% to $2.03 billion. The top line missed street estimate, which was at $2.17 billion.
While Hurricane Florence contributed to a 14% drop in net sales in North America, its biggest market – Europe – witnessed a 10% decline in net sales.
Excluding one-time items, the company earned $0.11 per share, three cents higher than what the street had expected.
“We are very disappointed with the supply chain disruptions that we have experienced over the last quarter and the resulting poor Q1 financial performance,” Chief Executive Officer Camillo Pane said in a statement.
Supply chain worries cost the company much more than what it had anticipated. Though it had initially estimated the expenses for the full-year to be about $50 million, cost to the company in the first year alone was $60 million.
COTY shares have fallen 22% in the past 52 weeks and 44% year to date.