Coty Stock Plunges on Q3 Earnings Miss

NEW YORK (TheStreet) -- Coty (COTY) - Get Report stock is retreating 8.02% to $28.57 on heavy trading volume on Tuesday afternoon following the company's disappointing fiscal 2016 third quarter financial report that was released before today's market open.

The New York City-based beauty company reported earnings of 9 cents per share on revenue of $950.7 million for the quarter ended March 31.

Wall Street was anticipating earnings of 12 cents per share on revenue of $970.7 million for the latest quarter.

Revenue increased 2% year over year because of growth from the color cosmetics segment, which offset declines from fragrance products, and skin and body care merchandise.

Additionally, Coty will incur costs of $1.2 billion over the next four years related to the $12.5 billion acquisition of Procter & Gamble's (PG) fragrance, color cosmetics and hair color business. The estimate is more than double the $500 million in costs that the company had estimated when the deal was announced last July.

So far today, 2.73 million shares of Coty have exchanged hands, more than double its average trading volume of 1.17 million shares.

Separately, Coty has a "hold" rating and a letter grade of C at TheStreet Ratings because of the company's unimpressive growth in net income, generally higher debt management risk and premium valuation.

You can view the full analysis from the report here: COTY

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.