Why the Costa share price tumbled lower again today

The Costa Group Holdings Ltd (ASX:CGC) share price dropped lower on Monday after announcing the resignation of its CFO…

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The Costa Group Holdings Ltd (ASX: CGC) share price has been on the move on Monday morning.

After initially sliding 2% lower in early trade, the horticulture company's shares are now flat at $2.44.

a woman

Why is the Costa share price on the move?

Investors were selling the embattled company's shares this morning after it announced the exit of one of its executives.

According to an announcement, Costa's chief financial officer, Linda Kow, has announced her resignation from the role.

Ms Kow intends to step down from the role on May 1 2020 after almost a decade with the company.

Costa's CEO, Harry Debney, said: "Linda has been with the business through various iterations, including family ownership, private equity and public ownership. During this time, Linda has played a major role in helping to transform and build the Costa business and establish its current growth trajectory.

"On behalf of the Board and Executive, I want to thank Linda for her contribution to the company. I wish her all the very best in her future career endeavours," said Mr Debney.

Mr Debney also advised that a recruitment process for a new chief financial officer will commence in the near future.

A series of downgrades.

No reason was given for the resignation of Ms Kow. But it certainly hasn't been an easy 12 months for the chief financial officer.

Over the last 12 months Costa has downgraded its earnings guidance no less than four times. This has weighed heavily on the Costa's share price in 2019, leading to a 12-month decline of 63%.

The most recent downgrade was for its calendar year 2019 guidance. This has been revised to an adjusted net profit of just $28 million, compared to its previous guidance of $57 million to $66 million.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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