Investing.com - Beauty product company Coty Inc 's (NYSE:COTY) shares were getting pummelled on Tuesday after the company reported a surprise quarterly loss and warned of declining demand for some of its beauty products.
Coty reported an adjusted net loss of $3.4 million, or nil per share, on revenue of $2.24 billion. Analysts had expected Coty would earn $0.09 per share on revenue of $1.44 billion.
Higher costs were behind the drop in earnings (despite the better-than-expected revenue) and the company said it suffered from "materially" higher marketing spend for the launch of certain fragrances and higher fixed costs related to the acquisition of P&G's brands.
At the same time that the company had higher fixed costs due to the acquisition of P&G’s brands, the company noted that retailer demand for brands such a CoverGirl that Coty acquired from P&G is declining as retailers opt to dedicate their shelf space to trendier beauty brands. "Shelf space loss has been an issue that we faced in the fourth quarter and it will continue to impact us until the second half of fiscal 2018," Chief Executive Camillo Pane told Reuters.
Coty's shares were down about 13% in afternoon trade Tuesday and set a new 52-week low of $16.08