Aug 19, 2024, 12:00 AM
Aug 19, 2024, 12:00 AM

Estée Lauder Forecasts Low 2025 Sales; CEO Freda to Step Down

Highlights
  • Estée Lauder predicts 2025 profit and sales below expectations in a struggling beauty market.
  • CEO Fabrizio Freda announces retirement amid challenging business outlook.
  • The company faces challenges with slowing global demand affecting future performance.
Story

Estee Lauder, the maker of MAC lipstick, has projected lower-than-expected profits and sales for 2025, contributing to a 10% drop in its shares during premarket trading. The company cited a decline in sales in China, attributing it to ongoing weakness in the prestige beauty segment, particularly during key shopping periods. This trend mirrors challenges faced by European competitor L'Oreal, which also reported disappointing sales and noted a lack of recovery in the Chinese market. The announcement of CEO Fabrizio Freda's retirement adds to the company's turmoil, occurring alongside a broader turnaround plan. Freda, who has been with Estee Lauder since 2008, will continue to oversee strategic and financial priorities until a successor is appointed. The company is currently evaluating both internal and external candidates for the CEO position, following the recent departure of Chief Financial Officer Tracey Travis after 12 years. Looking ahead, Estee Lauder anticipates fiscal 2025 sales to range from a 1% decline to a 2% increase, significantly below the analyst forecast of a 6.43% rise. Additionally, the company expects adjusted profit per share to fall between $2.75 and $2.95, compared to analysts' expectations of $3.96. Despite these challenges, Estee Lauder reported an increase in adjusted quarterly net sales, rising to $3.87 billion from $3.63 billion a year earlier, surpassing analysts' estimates of $3.81 billion.

Opinions

You've reached the end