Why Coty Inc. (COTY) Crashed on Wednesday

We recently compiled a list of the Heavy Selling Drags Share Prices of These 10 Firms. In this article, we are going to take a look at where Coty Inc. (NYSE:COTY) stands against the other stocks.

Wall Street’s major indices finished mixed on Wednesday, though generally pessimistic, as investor sentiment was dampened by higher-than-expected consumer price data which fueled concerns of a potential inflation rebound.

The Dow Jones and S&P 500 declined by 0.50 percent and 0.27 percent, respectively. Only Nasdaq posted gains, albeit a marginal 0.03 percent.

Among Wednesday’s losers, 10 companies were the worst performers, primarily due to disappointing earnings results, dismal outlook guidance, and downgraded ratings, among others. In this article, we have detailed the specific reasons behind their lagging performance.

To come up with Wednesday’s top losers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A close-up of a woman’s face wearing a beauty product, highlighting the company’s range of luxury items.

Coty Inc. (NYSE:COTY)

Coty Inc. fell by 7.49 percent on Wednesday, the second day, as traders sold off positions following the company’s announcement of disappointing earnings results for the past quarter.

In a statement, COTY said its net income last quarter fell 83 percent to $30.6 million from $186 million year-on-year, pulling down its net profit from July to December by 38 percent to $121.3 million from $196.2 million year-on-year.

Net revenues for the quarter dipped by 3 percent to $1.67 billion from $1.73 billion, while six-month net revenues were flat at $3.3 billion.

In the same release, COTY cut its annual profit forecast primarily due to expectations of lower demand for cosmetics products.

The company, which operates the brand CoverGirl has seen weakness in the Asian travel retail business, particularly at airports and travel destinations in Asia, including Korea and China.

Overall COTY ranks 7th on our list of Wednesday’s top losers. While we acknowledge the potential of COTY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than COTY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.