Estée Lauder Sinks After Dour 2023 View On Slow Recovery In Asia

By Donna Ahern
Estée Lauder Sinks After Dour 2023 View On Slow Recovery In Asia

Estée Lauder Cos Inc's shares plunged on Wednesday after the cosmetics maker forecast a bigger drop in full-year sales and profit than previously estimated, blaming a slow recovery in demand at duty-free and travel destinations, especially in Asia.

Shares of the company fell as much as 22% to hit a six-month low of $190.30 after the MAC brand owner slashed the forecasts for a third time.

European Luxury Companies

Meanwhile, European luxury companies LVMH and L'Oréal saw a rise in first-quarter sales, boosted by a rebound in Asia as China eased COVID restrictions last year.

Barclays analyst Lauren Lieberman said in a note Estee's profit forecast was the "last thing" expected even by the Street.


Estée said that while major shopping districts such as Hainan, an island in the southernmost province of China, and Korea saw more traffic, the conversion of travellers to consumers in luxury beauty lagged.

Even though China relaxed pandemic-related restrictions, the company saw January 2023 pressured by retailers de-stocking due to an increase in COVID-19 cases.

Progress In Travel Retail

Estée CFO Tracey Travis said that in a post-earnings call there has been progress in travel retail, which depends on duty-free sales at airports and travel destinations, through the third quarter and expects the sales to be up in double digits.

The company's profit, however, also remains pressured from a stronger dollar since it has sprawling global operations and convert foreign currencies into the greenback.


Estée expects full-year 2023 net sales to fall between 10% and 12%, compared with its prior forecast of a 5% and 7% decrease.

It also forecast adjusted profit per share to fall between 50% and 51%, compared with a 27% to 29% decrease it expected earlier.

However, the company beat third-quarter sales expectations but missed profit estimates.

Read More: Estée Lauder Fears Bigger Drop In Profit On Uncertain China Recovery

News by Reuters, edited by Donna Ahern, Checkout. For more A-brand news, click here. Click subscribe to sign up for the Checkout print edition.

Stay Connected With Our Weekly Newsletter

Processing your request...

Thanks! please check your email to confirm your subscription.