Coty Inc. shares fell more than 10% today after the company reported lower than expected revenue in the fourth quarter and a loss of more than $181 million during the period.

At Coty, fiscal year 2018 (FY18) reported net revenues rose 22.8% to $9.4 billion driven by a strong performance in the Luxury division. Reported fourth quarter 2018 net revenues grew by 2.6% to $2.3 billion.

In other news, Coty Inc. reported the resignation of Patrice de Talhouët, executive vice president and global chief financial officer, who is leaving Coty to pursue other opportunities. He will remain CFO through mid September 2018 and assist with transition thereafter. Coty is retaining an executive search firm to conduct a search for a successor.

Ayesha Zafar, Coty’s senior vice president, group controller, will serve as the interim CFO effective Sept. 15, 2018. She has been responsible for accounting operations and financial reporting, including as Coty’s principal accounting officer for more than two years, and she brings 30 years of finance experience across several multinational consumer goods and pharmaceuticals companies.

In FY18, reported Luxury net revenues increased by 25.15% to $3.2 billion powered by the success of Gucci Bloom and Tiffany, strong performance in Calvin Klein and philosophy, and excellent innovation execution across other global brands including Chloe Nomade and Marc Jacob’s Daisy Love, each of which gained share in the quarter. Growth in emerging markets was particularly strong during FY18, with Luxury brands growing low double digits in ALMEA driven by both fragrance and skin care.

In 4Q18, reported Luxury revenues increased by 14.6% versus the prior year.

In FY18, Consumer Beauty reported net revenues grew by 15.7% to $4.3 billion. Since the completion of the P&G Beauty transaction, Coty says it has made progress towards stabilizing the Consumer Beauty business, with LFL performance improving from (10%) in FY17 to (4%) in FY18. However, it is clear that the recovery is taking longer than expected. Contributing to this delay are external conditions including the decline of the mass beauty market in Europe and North America, increasingly strong competition, and an evolving retail environment that has shifted towards specialty retailers and e-commerce. Performance has also been impacted by internal factors such as short term supply chain disruption and the longer time required to rejuvenate global brands that have sustained multi-year declines.

In FY18, Consumer Beauty Europe and North America regions - which together account for over 70% of the division’s net revenues - declined mid to high single digits. This decline occurred against the backdrop of a weak underlying mass beauty market, which declined in the low single digits in Europe and North America across key color cosmetics, retail hair, body care and mass fragrance brands. Emerging markets ALMEA region was stable for Consumer Beauty, as strong double digit growth in most ALMEA markets was offset by decline in Brazil, following our strategic intervention on inventory and pricing, and the recent trucker strike. However, Brazil in-market performance continues to be very strong as we are gaining share and growing well ahead of the market. Coty also saw very strong e-commerce growth in the Consumer Beauty division, even excluding Younique.
 
Professional Beauty FY18 net revenues soared by 37.5% to $1.92 billion. It was a solid year for the Professional Beauty division, driven by good growth by hair brands and mid-single digit growth of the OPI nail brand.

Q4 reported revenues grew by 5.4% to $492.6 million. Coty’s hair brands delivered good growth in North America in 4Q18, while ALMEA growth was low double digits in the same period, driven by great performances in Japan, Latin America, India and China. OPI grew mid-single digits in 4Q18, including robust growth in Europe and ALMEA.

North America net revenues jumped 31% to $2.96 billion, as solid growth in Luxury driven by Tiffany and Gucci, and Professional Beauty could not offset pressure in Consumer Beauty amidst the relaunches of CoverGirl, Rimmel, and Clairol in our efforts to reconnect these brands with consumers. Europe net revenues rose 45% to $4.2 billion.