Estee Lauder Companies Inc (NYSE:EL, ETR:ELAA) expects “disappointing” sales and profit in fiscal 2025 as it continues to face challenges in Asia, the beauty company said on Monday.
The company expects a “more tempered performance than the industry” for fiscal 2025, guiding global prestige beauty to grow 2% to 3%.
Global prestige beauty is expected to grow by mid-single-digits in fiscal 2026, assuming stabilization in China, it added.
Under its Profit Recovery Plan, the company said it still expects to drive savings of $1.1 billion to $1.4 billion in fiscal 2025 and 2026, but noted that greater-than-expected headwinds in China and Asia travel retail are expected to partially offset the initial benefits.
“While our sales and profit outlook for fiscal 2025 is disappointing, this year we will make important strides, as we implement our strategy reset to continue rebalancing regional growth, deliver improved annual profitability, and strengthen go-to-market and innovation capabilities to elevate our execution in response to a more competitive market,” CEO Fabrizio Freda said in a statement.
“For fiscal 2025, we anticipate continued declines in the prestige beauty segment in China, mainly reflecting persistent weak sentiment among Chinese consumers.”
For fiscal 2024, the company’s adjusted earnings per share (EPS) fell 25% to $2.59, topping estimates of $2.21.
Net sales decreased by 2% to $15.61 billion from $15.91 billion but were narrowly ahead of estimates of $15.57 billion.
Shares of Estée Lauder traded flat at $95 in the early afternoon on Monday.