Coty changes distribution center plan after 'bad' earnings report, shares tank 21%
Coty Inc. Chief Executive Camillo Paine said the beauty company will "modify" its distribution center consolidation plan for the rest of 2018 after a fiscal first-quarter earnings report that analysts simply call "bad." Coty, whose brands include CoverGirl, Max Factor, Calvin Klein and Philosophy, reported a loss of 2 cents per share and adjusted EPS of 11 cents. Revenue totaled $2.03 billion. The FactSet consensus was for EPS of 7 cents and sales of $2.17 billion. "We're very disappointed with the supply chain disruptions we have experienced over the last quarter and the resulting full Q1 financial performance," Pane said on the call, according to a FactSet transcript. "While we have anticipated some level of disruption in the first quarter from warehousing and planning consolidation, the increased scope of the disruption resulted in much weaker results than previously expected." Over the last two years, Coty shut down three factories, restructured a fourth one, and consolidated other facilities. Pane said the company encountered supply chain problems at the end of the fourth quarter. "We're working swiftly to confine the majority of the impact of these temporary disruptions to the first half of fiscal 2019, although we expect some residual impact in the third quarter." Wells Fargo didn't hold back in its assessment. "There is no sugar coating this report - it was bad," analysts wrote. Wells Fargo rates Coty shares market perform. The stock is down 21.7% in Wednesday trading, and down 56% for the year to date. The S&P 500 index is up 4.8% for the year to date. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.