Coty shares slide 6% premarket after weaker-than-expected earnings

Coty Inc. shares slid 6% in premarket trade Thursday, after the cosmetics company posted far weaker-than-expected earnings for its fiscal fourth quarter as the coronavirus pandemic crushed sales. The company said it had a net loss of $722.8 million, or $1.01 a share, in the quarter, narrower than the loss of $2.799 billion, or $3.72 a share, in the year-earlier period. The company's adjusted loss excluding special items was 46 cents a share, wider than the 12 cents loss consensus of FactSet analysts. Revenue fell to $560.4 million from $1.506 billion, below the $1.320 billion FactSet consensus. "Coty's fourth quarter was marked by external shocks, as the COVID-19 pandemic triggered a crisis in the real economy and supply," Chief Executive Peter Harf said in a statement. "The severe sales contraction for total Coty, with revenues down $1.2 billion year-over-year, led to significant operating deleverage in the quarter, even as the company focused all its efforts on protecting free cash flow which came in inline with our expectations." The company is expecting a "significant improvement" in the first quarter of fiscal 2021. The divestiture of Wella is on track to close in 2020 and the company is aiming to cut $200 million in costs in fiscal 2021. Shares have fallen 66% in the year to date, while the S&P 500 has gained 7.7%.

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