Coty shares fell sharply on Thursday just after the cosmetics maker described a larger sized than-expected quarterly loss, citing the “external shocks” of the coronavirus pandemic.

For the fourth quarter, Coty’s internet income plunged sixty two.8% to $560.4 million while its internet loss narrowed to $722.8 million, or $1.01 a share, from $two.799 billion, or $three.seventy two a share, a yr previously. The firm posted an altered loss excluding distinctive objects of forty six cents a share.

Analysts had expected an altered loss of 12 cents for every share on income of $1.320 billion.

“Coty’s fourth quarter was marked by external shocks, as the COVID-19 pandemic triggered a crisis in the actual economy and supply,” Chairman and CEO Peter Harf reported in a news release. The “severe income contraction,” he added, led to “significant operating deleverage in the quarter.”

On news of the earnings, Coty shares dropped 8.8% to $three.50 in investing Thursday.

As Reuters reports, “the coronavirus-induced closure of shops and parlors hammered demand from customers for [Coty’s] beauty products” in the fourth quarter. Income at its purchaser beauty segment, which properties brands this kind of as Include Lady, fell about 55%, while its luxurious unit income plummeted seventy one%.

The firm reported its Americas segment was boosted by the contribution from its partnership with Kylie Jenner but the Kylie Elegance brand “was pressured thanks to the lockdown of its cosmetics 3rd social gathering manufacturer’s success center through the bulk of the quarter.”

Coty, which has recruited previous L’Oreal government Sue Nabi to get around from Harf as CEO, is anticipating to return to profitability in the present-day quarter.

“Coty is back,” Harf reported. In the last two months, we have noticed a substantial advancement in the business and we assume the favourable momentum to keep on, with a return to income in Q1.”

According to the Economic Occasions, Coty is now setting up to provide or shutter most of its factories and outsource more operations to offer with the fallout from the COVID-19 crisis.

But Barclays analyst Lauren Lieberman was skeptical. “We consider it will be hard to encourage traders that Coty is on a much better trajectory,” she reported.

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coronavirus, cosmetics, Coty, earnings, Peter Harf, retail