Ongoing supply chain disruptions in the U.S. and Europe have caused Coty shares to drop 22 percent this week, and contributed to a sharper Q1 sales drop than expected, according to a report by Reuters.
The issues also hit quarterly revenue and profit, according to the Financial Times, with the company stating the problems would affect the company in Q2 and going forward for the remainder of the fiscal year, which ends June 2019.
Supply chain problems arising from its warehouses began in August, alongside packaging shortages due to Hurricane Florence causing damage to a North Carolina factory. The hurricane affected shipping to retailers in the quarter, however, the company has stated it expects to completely recover the disrupted shipments during Q2.
Chief Executive Officer Camillo Pane said, “We are very disappointed with the supply chain disruptions that we have experienced over the last quarter and the resulting poor Q1 financial performance.”
The disruptions are said to have cost the company $60 million in the first quarter alone.