Coty Stock Stumbles on Fiscal 2016 First Quarter Revenue Miss
NEW YORK (TheStreet) -- Coty (COTY) - Get Report stock is falling 5.44% to $28.23 on heavy trading volume on Thursday afternoon after the company reported lower than expected revenue for the fiscal 2016 first quarter. Earnings surpassed estimates by 29 cents.
Before the market opened this morning, the beauty products company reported revenue that declined 6% year-over-year to $1.11 billion for the quarter ended September 30, missing estimates of $1.13 billion.
"Revenue growth was not where we would like it to be," interim CEO Bart Becht said in a statement. "While color cosmetics growth continued to be very strong due to Sally Hansen and Rimmel, and skin and body care trends are improving, fragrance growth is lacking."
Coty did post earnings of 59 cents per share for the quarter, beating estimates of 30 cents per share
In July, the cosmetics and fragrance company announced it will merger with Procter & Gamble Co.'s (PG) fine fragrance, color cosmetics, and hair color businesses in a deal that values the assets at $12.5 billion.
Coty announced it is on track to close the deal in the second half of 2016.
So far today, 3.7 million shares of Coty have exchanged hands, compared with its average daily volume of 1.6 million shares.
Separately, TheStreet Ratings team rates COTY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate COTY INC (COTY) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and premium valuation.
You can view the full analysis from the report here: COTY
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