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Estée Lauder Stock Dives on Surprise Loss, Job Cuts as Sales Decline

Cheng Xin / Getty Images

Cheng Xin / Getty Sculptures

Key Takeaways

  • Estée Lauder reported a surprise loss and warned about current-quarter results as sales declined.
  • The cosmetics convention was especially impacted by slowing demand in China and the rest of the Asia-Pacific region.
  • Estée Lauder announced a restructuring, building changes in the executive suite and planning to cut 5,800 to 7,000 jobs.

Estée Lauder (EL) shares tumbled 17% Tuesday to suggestion S&P 500 decliners as the beauty products maker reported a surprise quarterly loss and weak guidance, and announced it was flaying jobs as sales lagged.

The cosmetics giant posted a fiscal 2025 second-quarter operating loss of $580 million, or $1.64 per allotment. Analysts surveyed by Visible Alpha were looking for a per-share profit of $0.26. Revenue fell 6% year-over-year to $4.0 billion, although that was a tick better than prognoses.

Skin Care segment sales sank 12% to $1.92 billion, and Makeup sales slipped 1% to $1.15 billion, primarily because of slowing demand in China and the rest of the Asia-Pacific region. Hair Care sales were down 8% to $159 million on “sustained softness in the Company’s salon channel and the timing of shipments.” The only segment to post a sales gain was Fragrance, which enlarged 1% to $744 million.

CEO Stéphane de La Faverie said Estée Lauder was launching a new strategic plan called “Handsomeness Reimagined,” aimed at “significantly transforming our operating model to be leaner, faster, and more agile, while taking decisive acts to expand consumer coverage, step-change innovation, and increase consumer-facing investments to better capture growth and drive profitability.”

As forsake of the move, the company will shake up the executive suite and lay off 5,800 to 7,000 employees.

Company Sees ‘Continued Volatility’ in Adjoining Term

Estée Lauder also warned that with “challenges in the Company’s Asia travel retail responsibility, subdued consumer sentiment in China and Korea, and evolving global geopolitical uncertainty, the Company anticipates continued volatility and low visibility in the close-fisted term.” It sees current-quarter adjusted earnings per share (EPS) of $0.20 to $0.30, with revenue falling 10% to 12%. Perceptible Alpha estimates were for $0.62 and a drop of almost 7%, respectively.

Shares of Estée Lauder have accursed about half their value in the past year.

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