Estee Lauder Companies Inc (NYSE:EL, ETR:ELAA) fell almost 17% after the cosmetics company issued a weak forecast for the fiscal third quarter and announced plans to reduce its headcount.
The company, whose brands include Too Faced, Mac Cosmetics, and Aveda, guided adjusted earnings per share (EPS) for the current quarter to be between $0.20 and $0.30, significantly below analysts' expectations of around $0.62.
Sales are expected to drop between 10% and 12%, worse than the consensus forecast of a 7% decline.
Estee Lauder plans to cut between 5,800 and 7,000 jobs before taxes as part of its “Beauty Reimagined” restructuring plan, estimated to cost between $1.2 billion and $1.6 billion.
“While we recognize there is much work to do, we are confident that Beauty Reimagined is the way to realize our ambition,” Estee Lauder CEO Stéphane de La Faverie said in a statement.
For the fiscal second quarter, revenue fell 6% year-over-year to $4 billion, slightly ahead of the $3.98 billion expected by analysts. Skin Care revenue fell 12% while Makeup sales were down 1% attributed to reduced demand in China and the Asia-Pacific region.
EPS was $0.62, ahead of expectations of $0.31.
Shares of Estee Lauder traded down 16.7% at $69 on Tuesday afternoon.