The beauty products industry is very volatile, a fact which Coty Inc (NYSE:COTY) is grappling with. Customer sentiment, preference and perception can sway the market in any direction quite abruptly. Coty is in one of these doldrums. The company is experiencing supply chain disruptions that are hurting revenues.
Over the past four weeks, Coty shed 10.46% off its share value, Lakeland Observer reveals. However, the trend worsens with the change of metric. For instance, if one focused on a 6-month period, it is clear that there is a -34.71% change in share value. In the same breath, the shares changed -29.94% over the last full trading year.
Poor share value due to supply chain disruptions
Interestingly, Seeking Alpha agrees with the assessment. However, it further adds that Coty might just be victim of inadvertent supply chain disruptions. According to Seeking Alpha, decelerating demand for beauty products from China is a good place to start. China is one of the largest markets for Coty’s products. Therefore, when such disruptions as devaluation of the Yuan happen, it throws the market sideways.
However, amid all the gloom, Seeking Alpha offers a perspective of light at the end of the tunnel. In an August assessment, the publication noted that all was not lost for Coty. Also, it noted that the ongoing transformation of the company would disrupt operations and probably hit revenues. However, the luxury division of the company is sustaining revenues due to innovation, geographic expansion and new product offerings.
In addition, the company is relaunching CoverGirl and Clairol brands in an effort to drive up revenues. The brands come with improved innovations that seek to capture the taste of the market. Also, the company hopes to optimize the utility of the product offerings for the purpose of capturing and retaining customers.
However, investors are still in doubt regarding the company’s efforts towards returning Coty to productivity. Interestingly, Coty hopes to be able to determine and respond to such sentiments with the help of social media. According to Seeking Alpha, the coming months will determine whether this strategy is successful.
This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.