Estée Lauder shares sink on weak outlook and a billion-dollar restructuring charge
Shares tumbled more than 11% on Tuesday after the beauty giant’s current-quarter forecast underwhelmed investors. It also plans to cut up to 7,000 jobs.
Estée Lauder shares tumbled more than 10% on Tuesday after the beauty giant gave a weak outlook for the current quarter, took a $1 billion restructuring charge, and said it plans to cut up to 7,000 jobs.
Despite the shake-up, Estée’s Q2 results managed to top expectations. Sales for the quarter hit $4 billion, edging past Wall Street’s $3.98 billion forecast. Meanwhile, earnings per share came in at $0.62 — nearly double estimates. Still, the Bobbi Brown and Clinique parent continues to struggle with weaker consumer spending in North America as well as key markets like South Korea and China. Sales have declined year over year for the past two straight quarters.
For the current quarter, it said it expects to earn $0.24 to $0.34 a share, far below analysts’ expectations of $0.63, according to FactSet.
The company also unveiled Beauty Reimagined, a new restructuring program aimed at driving more sustainable sales growth and improving margins. The plan includes “unburdening smaller brands” and ramping up ad spending, among other efforts.
Estée Lauder shares are down more than 50% over the past year.
