Estee Lauder

Estee Lauder’s (EL) quarterly dividend cut signals “stress continues to be persistent” on earnings and cash flow in the medium term, BofA Securities said Friday in a report. The 5% decline in fiscal Q1 organic sales, led by weaker-than-expected figures in China and Asia travel retail, compared with the firm’s estimate for a 4% decline. The firm slashed its earnings per share forecast to $1.50 for fiscal 2025 from $2.80 and cut the fiscal 2026 projection to $2.95 from $$4.55. The fiscal 2027 outlook fell to $3.50 from $5.20. The dividend cut “implies a return to $3.50 of EPS over time assuming a 40% payout ratio,” the report said. BofA lowered its price target for the stock to $75 from $100 and reiterated its neutral rating. “With China still decelerating and uncertain and a new CEO starting in January, it seems premature to ‘buy the dip’ at this point,” BofA […]

Estée Lauder’s latest results, coupled with its guidance withdrawal, further reduces its visibility on its path to recovery, Morgan Stanley analysts say in a research note. The cosmetics company’s incoming CEO Stéphane de La Faverie will likely need to add aggressive cost-cutting measures and reinvestments behind the company’s portfolio once he takes over the top job, the analysts add. “Bottom line, Estée Lauder is acknowledging incremental weakness in Asia travel retail in guidance, which drives weak second-quarter guidance and withdrawn full-year guidance.” Shares drop 19% to $71.01.

Estee Lauder pulls guidance for its current fiscal year, but what insight it did provide for the current quarter spooked investors badly. The cosmetics company projects a F2Q sales drop between 8% and 6%, and adjusted EPS well below what analysts were expecting. The main culprit is the ongoing problems in China and the Asia retail market. While outgoing CEO Fabrizio Freda expects stimulus measures there to eventually stabilize the high-end beauty market, it’s going to take some time. Estee Lauder does buy some breathing room for new leadership, with a halved dividend to free up some resources. Estee Lauder plunges 23% premarket to $66.55.

Estée Lauder had a big 3Q earnings beat, but its 2H outlook overwhelmed investors, Raymond James analyst Olivia Tong says in a research note. The beauty brands conglomerate shift in marketing expenses to 4Q from 3Q muted the impact of the beat on the FY results, leading to a 13% stock drop on Wednesday, erasing its year-to-date gains. “The hill Estée Lauder must climb to restore investor confidence just got higher given flat U.S. sales and a slower than expected ramp in China,” the analyst says. Tong sees a number of positive factors over the next 12 months, including a higher midpoint of the FY24 EPS outlook and better U.S. distribution. Shares rise 4.7%.

By Sabela Ojea Estée Lauder logged higher in sales in the latest quarter amid a recovery in its Asia travel retail business, but guided for a deeper drop in full-year sales amid a continued softness in the prestige beauty market in Mainland China. The beauty company behind Clinique, MAC Cosmetics and La Mer, on Wednesday posted a fiscal third-quarter net profit of $330 million, or 91 cents a share, compared with $156 million, or 43 cents a share, for the same period a year earlier. Stripping out one time items, the company’s earnings per share came in at 97 cents, ahead of the 50 cents per share anticipated by analysts. Sales rose 5% to $3.94 billion, beating analysts expectations of $3.92 billion and in line with management views. The company said skin care and makeup sales rose 8% and 3%, respectively, also seeing a sequential recovery these categories. Sales for

Estee Lauder Companies (EL) reported fiscal Q3 adjusted earnings Wednesday of $0.97 per diluted share, up from $0.47 a year earlier. Analysts polled by Capital IQ expected $0.50. Net sales for the quarter ended March 31 were $3.94 billion, compared with $3.75 billion a year ago. Analysts surveyed by Capital IQ expected $3.92 billion. The company said it expects fiscal Q4 adjusted earnings of between $0.18 and $0.28 per diluted share. Analysts polled by Capital IQ expect $0.75. For fiscal year 2024, the company said it now expects adjusted earnings of $2.14 to $2.24 per diluted share, compared with $2.08 to $2.23 anticipated previously. Analysts polled by Capital IQ expect $2.25.

The downtrend of cosmetics imports to China didn’t show any signs of improvement in the 1Q, Citigroup analyst Filippo Falorni says in a research note. China saw a 21% year-over-year decline in imports, and a 15% U.S. drop. “The continued decline of imports from the U.S. would suggest trends for Estee Lauder in Mainland China could remain sluggish for this quarter,” Falorni says. “However, we continue to believe the cycling of large inventory reductions in Korea/China travel retail could support a return to sales growth.” L’Oreal, on the other hand, can mitigate the impact of subdued China market growth and buy time until a recovery on easy comparatives in this region, Falorni adds. Citigroup’s top pick is the Chinese beauty company Proya for its strong earnings outlook at 25%-30% growth.

B of A Securities analyst Bryan Spillane upgrades Estee Lauder Cos (NYSE:EL) from Neutral to Buy and raises the price target from $160 to $170.

Estee Lauder’s (EL) bid to sell its Clinique brand through Amazon.com’s (AMZN) Premium Beauty store is a “logical” next step for the cosmetic company, Oppenheimer said Thursday. The deal, announced Wednesday, should enhance Estee Lauder’s distribution channels and boost its competitiveness. L’Oreal saw a 70% increase in demand for its products after they began selling on the Amazon platform, Oppenheimer analysts said. The company’s latest move appears favorable, but the elevated stock price and an uncertainty around its travel retail channel keep the risk/reward model unchanged. Estee Lauder “shares remain on our radar,” the investment firm said, issuing a perform rating with no price target. Estee Lauder shares were more than 6% higher in recent trading.

Shares of Estée Lauder on Thursday climbed after Bank of America upgraded its recommendation on the stock to buy from neutral as the beauty giant implements a profit-recovery plan. The owner of cosmetics brands such as Clinique, La Mer and Bobbi Brown should benefit from a reacceleration of sales and profit growth as Estee Lauder exits the fiscal year ending in June 30 with better visibility into end-market demand, Bank of America analysts say in a research note. The New York company lost focus on product upgrades and innovation in recent years. However, its current innovation push to respond faster to trends and repair brands portfolios should come with improvements across the prestige category. Bank of America expects to see innovation specifically aimed at reversing recent market-share softness in makeup from MAC and Tom Ford. Estée Lauder’s success is dependent on achieving more consistent growth across developed markets and emerging

Estée Lauder’s latest move amid its profit recovery plan is aimed at gaining consumers by taking control of the U.S. ecommerce giant, following similar steps from competitors such as L’Oréal, Coty and Shiseido. It directly partners with Amazon for the first time by launching a U.S. Amazon Premium Beauty store for Clinique. Other Estée Lauder brands will have their own Amazon stores over the coming months, CEO Fabrizio Freda says. Amazon, which started selling cosmetics in 2004, is leading growth across all retailers in beauty growth, with prestige outpacing mass growth, according to NIQ data from December. Shares rise 2% to $142.15.

Estée Lauder is shifting its innovation in China so the company can understand what local consumers really want, CEO Fabrizio Freda says at UBS Global Consumer and Retail Conference. The beauty giant has rationalized its innovation to reduce the amount of what it calls risky innovation, and dramatically increased practical innovation with scientific advantages and clear consumer desire, Freda says. Estée Lauder is also focused on boosting consumer activation in this market by looking into the way it uses its social media channels. Overall, the company is setting its efforts toward winning the global consumer through its profit recovery plan, Estée Lauder’s Executive Group President Jane Hudis says. Shares fall 1.3% to $155.88.