Estee Lauder's Fiscal 2025 Sales Outlook Disappoints: Retail Mood Turns Optimistic On Q1 Beat

Cosmetics giant Estee Lauder (EL) forecast its fiscal 2025 sales below Wall Street expectations on Thursday, signalling continued weakness in its America and China markets.

The company said it would move forward with its previously announced restructuring plan, which includes cutting thousands of jobs, and steps to offset the effects of new U.S. import tariffs.

Estee expects net sales in its fiscal year ending in June to be down 8% to 9%, compared with a 7.1% fall estimated by analysts polled by LSEG/Reuters.

It also gave a bottom-line forecast of $1.30 to $1.55 adjusted per share profit for the year, which came in slightly above market estimates.

The company had withdrawn its fiscal outlook in October due to uncertainty in the Chinese market, just before CEO Stephane de La Faverie took over.

For its fiscal third quarter, which ended in March, Estee's net income nearly halved to $159 million from $335 million last year.

On an adjusted basis, earnings of $0.65 per share were higher than a $0.31 estimate from FactSet.

Sales plunged 10% to $3.55 billion, but came in just higher than the FactSet forecast of $3.52 billion.

Estee had previously warned that it would lay off 5,800 to 7,000 employees and book charges between $1.2 billion and $1.6 billion as part of a major business restructuring that will run through fiscal year 2027.

As of April 24, the company said it had approved initiatives totaling cumulative charges of $623 million and a net reduction of over 2,600 positions.

On Stocktwits, the retail sentiment turned from 'bearish' to 'bullish', and message volume jumped to 'high'.

A bullish user noted that this stock "always drops after a quarterly (report) and then tends to move back up later in coming weeks."

Estee specializes in skincare, makeup, fragrance, and hair care products, and owns brands like MAC, Clinique, and La Mer.

Its shares are down 21.5% year to date.

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