Estée Lauder Group Down 10% in Q1 2024
The high-end American cosmetics giant Estée Lauder continues to be affected by the slow recovery of the Chinese market. The revenue for the first quarter of the fiscal year 2024 (ending in September) has declined by 10% to $3.52 billion.
By Eva Morletto02 novembre 2023
In China, the luxury beauty product market has been sluggish. In a press statement, the Estée Lauder Group attributed its mixed results to the "anticipated pressures in travel-related retail activities in Asia." The revenue for the first quarter amounts to $3.52 billion. Only the makeup and fragrance divisions have recorded positive results, compared to skincare products.
As for the business and financial performances in other regions, they have helped mitigate the decline in results. This includes the United States, despite inflation, and in certain Asian markets such as Japan - where the brand enjoys a strong "luxury" identity among Japanese women - and Hong Kong. Europe has also shown encouraging results, especially in Germany and England.
As a result of the quarterly results falling below analysts' expectations, who had anticipated $3.53 billion, Estée Lauder has lowered its forecasts for 2024. For the fiscal year 2024, the cosmetics group now expects revenue to increase by a maximum of 1% and potentially decrease by 2%. Previous forecasts had projected growth between 5% to 7%.
The effects on the stock market were immediate, with Estée Lauder experiencing a sharp decline on Wall Street. Since the beginning of the year, the stock has fallen by 48%.
To improve its results, the American company has announced a strategy to increase prices on selected products and optimize production costs.
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