Shares of Estée Lauder (EL) are down 5% after the cosmetics giant issued weak forward guidance and announced that chief executive officer (CEO) Fabrizio Freda is retiring.
New York City-based Estée Lauder said that it expects earnings of $2.75 U.S. to $2.95 U.S. per share for the current 2025 fiscal year.
Analysts had earnings of $3.97 U.S. a share penciled in for the company.
Estée Lauder also said that it sees revenue for the remainder of the fiscal year in a range of a 1% decrease to an increase of 2%.
The company blamed the weak outlook on soft sales in China, saying that it sees a more “tempered performance” in the make-up industry moving forward.
At the same time, Estée Lauder announced that CEO Freda will retire in coming months. A search has begun for his replacement, both internally and externally.
Estée Lauder has struggled with slowing sales in China since the Covid-19 pandemic struck in 2020. In its most recent quarter, sales in Asia fell 7% year-over-year to $1.21 billion U.S.
Despite the disappointing guidance and news of the CEO’s retirement, Estée Lauder managed to beat expectations for its most recent quarter.
The company announced earnings for the period ended June 30 of $0.64 U.S. That handily beat analysts’ forecasts of $0.26 U.S. a share in profits.
Quarterly revenue of $3.87 billion U.S. topped estimates of $3.81 billion U.S.
Prior to today (Aug. 19), the stock of Estée Lauder had declined 37% over the last 12 months to trade at $94.97 U.S. per share.
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