Why Coty Inc. (COTY) Plunged Last Week?

We recently published a list of These Were Last Week’s 10 Worst Performers. In this article, we are going to take a look at where Coty Inc. (NYSE:COTY) stands against other last week’s worst performers.

Ten companies posted double-digit declines last week amid a series of dismal earnings performance and outlook guidance that weighed down on investor sentiment, bucking an overall strength of Wall Street’s main indices on a week’s basis.

Over the past five trading days, the Dow Jones registered growth of 0.5 percent, the S&P 500 increased by 1.47 percent, and the tech-heavy Nasdaq rallied by 2.57 percent.

To come up with the list, we only considered 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)

Shares of Coty Inc. (NYSE:COTY) fell 17 percent week-on-week, ending Friday’s session at $5.58 apiece versus the $6.76 registered on February 7 as investors sold off positions following disappointing earnings performance last year and pessimistic outlook guidance.

In its latest earnings release, COTY registered an 83-percent lower net income for the past quarter, ending at $30.6 million versus the $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.

Given the dismal performance, Coty Inc. (NYSE: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 6th on our list of other last week’s worst performers. While we acknowledge the potential of COTY as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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.

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