Estee Lauder (NYSE:EL) dropped in pre-market trading after the cosmetics maker reported a lower-than-estimated 7.4% drop in its fiscal fourth-quarter revenue, and provided a weak forecast.
Shares of the New York-based company declined as much as 2.7% to US$86.48. The stock had gained 17% since the beginning of the year through the close of trading on Friday.
Net income fell to US$153.0mln, or US$0.40 per share, in three months ended June 30, from US$257.7mln, or US$0.66 per share, a year earlier; that topped the US$0.34 average estimate of 20 analysts polled by Capital IQ.
Fourth-quarter sales fell to US$2.52bn from US$2.73bn year-over-year, which trailed the Wall Street consensus of US$2.57bn.
Sales were hurt by a stronger dollar and lower demand for Clinique and Estee Lauder skin care products.
Sales in the skin care business dropped 16% to US$1.01bn, while sales in the make-up business declined 4% to US$1.02bn. Fragrance business sales climbed 9% to US$336.1mln in the quarter, while sales in hair care business rose 4% to US$139.8mln.
For the fiscal first quarter, Estee Lauder expects net earnings, including the negative impact of foreign currency translation and acquisitions, of US$0.66 to US$0.69 per share.
The company projects first-quarter constant currency earnings of US$0.75 to US$0.78 per share. Analysts forecast earnings of US$0.81 per share.