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Coty Stock Drops; Secondary Offering of 50M Shares Priced

KKR Rainbow Aggregator will be selling more than 50 million shares of beauty products retailer Coty. The stock is lower.

Shares of Coty  (COTY) - Get Coty Inc. Class A Report dropped on Wednesday after the New York beauty-products specialist unveiled the pricing of a secondary offering of more than 50 million Class A shares. 

The shares are priced at $8.53 each by KKR Rainbow Aggregator. When the offering closes, KKR Rainbow will retain 568,367 shares of Coty's Series B convertible stock. 

Coty is not selling any Class A shares in the proposed offering, which is being underwritten by Morgan Stanley. 

Shares of Coty at last check dropped 10% to $8.31. 

In August, Coty missed Wall Street's fourth-quarter earnings expectations, but beat revenue estimates due in part to surging sales in the U.S. and China.

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Coty reported a net loss of $210.2 million, or 29 cents a share, compared with a loss of $722.8 million, or 91 cents a share, a year earlier. The adjusted loss came to 9 cents a share, compared with the FactSet consensus for a loss of 5 cents a share.

Revenue totaled $1.06 billion, up nearly 90% from a year earlier and ahead of the FactSet consensus of $1.01 billion.

The revenue results lapped the peak of Covid-19 impact in the prior year, the company said, even as virus-related restrictions continued in many markets. 

Coty also said that it was pursuing a partial initial public offering of its Brazil business. 

Earlier on Thursday, Coty said it completed its first filing at CVM - the Securities Commission that regulates capital markets - in Brazil to begin the process.