Salem Radio Network News Thursday, February 22, 2024

Business

Estee Lauder sees weaker annual forecast on slow recovery in Asia travel retail

(Reuters) -Estee Lauder projected full-year net sales and profit below market expectations on Friday, signaling a slower-than-expected recovery in its travel retail business, mainly in Asia, and easing demand in the United States.

Shares of the New York-based company were down about 2% in premarket trade.

Major companies across the globe have taken a cautious stance regarding their bets on a rebound in China, as the world’s second-largest economy struggles to revive demand and battles rising youth unemployment rates and a high cost of living.

Analysts have said the drop in consumer demand in China and a slow recovery in Asia travel retail – sales made at airports or travel destinations like Korea and China’s Hainan – could impact luxury companies like Estee, which makes about 30% of its annual revenue from the Asia Pacific region.

“Asia travel retail pressured results, particularly in Skin Care, and we continued to experience softness in North America,” CEO Fabrizio Freda said in a statement.

Sales in the company’s skincare segment fell 14%. Estee Lauder’s Americas region reported flat net sales compared to a year ago.

The cosmetics maker expects full-year 2024 sales to rise between 5% and 7%, compared with analysts’ estimate of an 8.8% increase, according to Refinitiv IBES data.

The MAC brand owner expects full-year 2024 adjusted profit per share to be between $3.50 and $3.75, compared with analysts’ expectation of $4.83.

The company’s net sales rose to $3.61 billion in the fourth quarter, from $3.56 billion a year earlier. Analysts had expected revenue of $3.47 billion.

(Reporting by Granth Vanaik and Ananya Mariam Rajesh in Bengaluru; Editing by Pooja Desai)

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