Estee Lauder Cuts Profit Outlook Again, Citing Coronavirus
(Bloomberg) -- Estee Lauder Cos. cut its earnings outlook for a second straight quarter, saying the coronavirus outbreak in China would crimp demand for luxury cosmetics.
- Earnings excluding some items will be $5.60 to $5.70 a share for the full year, down from a previous range of $5.85 to $5.93.
- The company already trimmed its profit outlook three months ago, citing softness at stores in the U.S. and U.K., the trade war and expectations that brisk sales growth in China will moderate. Now, it’s also grappling with the unknowns from the coronavirus outbreak, saying it “expects global prestige beauty to be adversely impacted over the next few months.”
- Estee Lauder gets about a quarter of its revenue from the Asia/Pacific region and it remained its fastest-growing market last quarter, fueled in part by China.
- The company continued its acquisition spree last quarter, spending about $1.1 billion in November for the rest of South Korean cosmetics maker Have & Be Co. that it didn’t already own, and gaining the Dr. Jart+ brand.
- The Americas region is still a work in progress. Net sales barely rose there last quarter. The region has struggled, especially in makeup and at its physical stores, though online sales are growing.
- The stock had dropped about 2% this year through Wednesday’s close, after jumping 59% last year.
- For the company statement, click here.
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