The Costa Group Holdings Ltd (ASX: CGC) share price has been hammered 16% lower in early trade this morning after earlier reporting a weak full-year earnings result.
At the time of writing, the Costa share price is the worst-performing stock within the S&P/ASX 200 (INDEXASX: XJO) index after announcing a 15% drop in net profit.
What did Costa announce in its full-year results?
Costa's full-year net profit plummeted 15% to $41.1 million for the year ended 30 June 2019 despite increasing revenue by 11.8% on the prior corresponding period (pcp).
However, the company's $573 million revenue result couldn't stop its earnings (EBITDA) figures also falling lower, with Costa citing international growing conditions for a variety of fruits and vegetables as a big earnings drag.
Overall, investors were unlikely to be happy with a 15% drop in earnings but, to be fair, the Costa result did land at the lower end of its updated FY19 guidance range.
However, management did forecast significant headwinds for FY20 and beyond including expected softer mushroom and blueberry pricing, which sent the company's share price lower in early trade.
The pain was compounded for those investors that bought up big on Costa shares yesterday, with the Costa share price surging 8% to $3.79 per share at market close.
Could Costa shares be in the buy zone?
Given the Costa share price woes so far this year, I'm not sure I'd be jumping into Costa shares just at the moment.
Since the start of 2019, the Costa share price has seen a couple of major falls following trading and growth updates in both January and May.
The Costa share price crashed 40% lower in January after it flagged lower earnings and stifled growth forecasts, while again in May it was sent further south after further earnings guidance.
On the whole, it appears as if Costa does have some way to go before investors will be satisfied that it has turned around the ship, and I'd be revisiting the company as a potential cheap buy in early 2020.
