Coty (COTY) reported weaker-than-expected results for the 2017 fiscal first quarter on Wednesday. Revenue was hurt by a slide in demand across its segments, including fragrances, color cosmetics and skin and body care.
Shares were down 5.44% to $20.70 in pre-market trading today.
The New York-based beauty products company posted adjusted earnings of 23 cents per diluted share, below analysts' estimates of 33 cents per share.
Revenue dropped 3% to $1.08 billion year-over-year and was lower than Wall Street's estimates of $1.14 billion.
Fragrances net revenues fell 10% as growth in brands such as Chloe and Davidoff did not offset declines in celebrity and mass fragrances and lower Calvin Klein revenues. Color cosmetics net revenue slumped 10%, while skin and body care net revenue dropped 7%.
Coty, whose brands include Sally Hansen, Rimmel London and CoverGirl, expects similar revenue trends in the fiscal second quarter.
The company remains committed to its previous adjusted earnings per share target of at least $1.53 for fiscal 2020 despite the profit impact of current revenue declines.
Coty closed its merger with Procter & Gamble's (PG) specialty beauty business on October 1. With the close of the deal, Coty has paid $11.6 billion, including $1.9 billion in assumed debt.
"As expected, the extensive work over the last 15 months on closing the transaction and merging the two businesses has come at a cost," Chairman Bart Becht said in a statement.
"The resources which normally work on the business, have also been working on closing the transaction...The resulting distraction as well as the recent change in management teams in our headquarters, regions and countries, have contributed to a decline in Coty stand-alone revenues and profits in Q1," he noted.