Estée Lauder Companies, Inc. (EL, Financial) dipped Thursday following the cosmetics behemoth's mixed first-quarter results. Diving into the specifics, it posted adjusted profits per share of 14 cents topping Wall Street's projection of 9 cents but revenues of $3.36 billion missed the consensus estimate of $3.371 billion.
Driven by slow demand in the Skin Care area, quarterly sales dropped 4%, with its Skin Care segment shedding 7%; also declining were Makeup (-2%), Fragrance (-1%), and Hair Care (-6%). Estée Lauder's organic net sales fell 5%, mostly in line with declining consumer confidence in China and a slowdown in the Asia travel retail industry—especially in Hong Kong SAR. Further stressing sales in a declining retail industry were lower replenishment orders and inventory issues. Thanks mostly to $159 million in losses from talcum litigation settlements, the business also recorded a net loss of $156 million, compared to a $31 million profit the year before.
"We are only providing guidance for the second quarter and retracting our fiscal 2025 outlook in this complex industry landscape, including the difficulties in forecasting market recovery in China and Asia travel retail," stated Fabrizio Freda, President and CEO of Estée Lauder.
