Estée Lauder Fears More Falling Profits Due to China’s Uncertain Recovery
February 2, 2023
Estee Lauder Cos Inc forecasts full-year profit to fall more than initially estimated, citing uncertainty over a recovery in major China market.
Meanwhile, analysts expect China’s recent move to ease the most stringent Covid-related restrictions and lift travel restrictions to improve sales to companies. US beauty and luxury companies, such as Estee, have been affected by the country’s strict no-Covid policy.
Shares of the New York-based company have fallen about 1% in the first half of the year travel retail in the second half of the year.
Estee said it expects sales in mainland China and Asian travel retail to return in the second half of the year.
“Outside of China, travel retail looks strong, adding that the segment’s recovery in the country remains an important question,” said Robert Ottenstein, analyst at Evercore ISI. important.
Lower sales at Asian travel retailers and fewer inventory orders from the United States due to concerns about slowing demand, weighed on lipstick maker MAC’s sales in the quarter. two.
“One concern during the quarter was the obvious weakness in the US and it looks like they could lose market share in terms of skin care,” added Ottenstein, noting the drop in sales in the Americas. 5%.
Estee expects annual adjusted earnings per share to fall between 27% and 29%, compared with a previous forecast of a 19% to 21% drop and net sales down about 5% to 7%, compared with the 6% and 8% % reductions forecast previously.
© Thomson Reuters 2023 All rights reserved.