Shares of International Flavors & Fragrances plunged in after-hours trading Monday after the company cut its outlook, with sales volumes remaining weak as customers work through existing inventory.
The stock was down 19% to $64.95 after closing the regular session at $80.34. Shares are down 23% this year.
The New York-based maker of flavors and fragrances said it expects sales between $11.3 billion and $11.6 billion this year, down from its prior view of $12.3 billion.
The company said that it doesn’t expect sales volumes to improve as previously expected due to continued customer destocking. Sales volumes are seen being down at a mid- to high-single digit rate, and previous expectations were that it would hold steady due to a significant decline in functional ingredients.
It projects adjusted earnings before interest, taxes, depreciation and amortization of $1.85 billion to $2 billion, down from its prior view of $2.34 billion.
The lowered outlook comes after the company reported second-quarter earnings below analyst expectations, with sales falling 11%.
IFF said that it is launching a sale process for its Lucas Meyer cosmetics business and is looking at other strategic alternatives. It is also taking steps to improve performance in its functional ingredients unit, including cutting costs.