Estee Lauder Companies Inc (NYSE:EL) has cut its annual forecasts despite rebounding travel retail after COVID-19 restrictions eased globally and in China.
The cosmetics company now forecasts a bigger drop in full-year sales and profit, according to its latest earnings release.
Estee cited a slower-than-expected recovery in Asia travel retail and major market China as reasons for the downward revision of its annual forecasts.
For its fiscal 3Q ended March 31, 2023, Estée Lauder reported a 12% drop in net sales, primarily due to weakness in Asia travel retail in Hainan and Korea. The company said the decline was partially offset by growth in nearly every market, including the United States, the United Kingdom, Hong Kong, and emerging markets globally.
Despite beating third-quarter sales expectations, the company missed profit estimates.
Net earnings for the quarter were $156 million, compared to $558 million in the prior-year period, while diluted net earnings per common share were $0.43, compared to $1.53 a year earlier.
Estee expects full-year 2023 net sales to fall between 10% and 12%, compared to 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 decrease between 27% and 29% it expected earlier.
New York-listed shares of Estee Lauder plummeted over 18% in premarket trading Wednesday.
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