NTCO - Why Natura & Co Stock Tanked 12.5% at the Open Today
Shares of Natura & Co (NYSE: NTCO) fell by as much as 12.5% in early trading on Thursday after it delivered its fourth-quarter report following the close of trading Wednesday. The results for the cosmetics company -- which owns Avon, The Body Shop, and Aesop, as well as its namesake brand -- were mixed, but the broader trend here is likely unnerving investors.
Brazil-based Natura's sales fell roughly 5% in constant-currency terms in Q4, and gross profit fell nearly 2%. However, its gross margin improved, leading to a nearly 4% improvement in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Net margin also advanced by an impressive 4.5 percentage points, leading to a net income improvement of nearly 300%. So the top line wasn't so great, but the company was able to cut costs and improve its bottom-line results. That mixed showing isn't exactly bad news, but when you step back and look at the bigger picture, things appear more troubling.
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Why Natura & Co Stock Tanked 12.5% at the Open Today