Loading...
•
Sep 30, 2023
Estee Lauder Q1 2024 Earnings Report
Net sales and diluted EPS declined due to pressures in Asia travel retail and a slower recovery in mainland China, but profitability exceeded expectations.
Key Takeaways
The Estée Lauder Companies reported a 10% decrease in net sales and a significant decline in diluted EPS for the first quarter of fiscal 2024. The results were impacted by challenges in Asia travel retail and a slower recovery of prestige beauty in mainland China, although organic sales grew in the United States and other markets. The company is lowering its full-year outlook due to these headwinds but is accelerating its profit recovery plan.
Net sales decreased by 10%, with organic net sales declining by 11%.
Diluted EPS decreased to $0.09, with adjusted diluted EPS declining to $0.11.
The company is lowering its fiscal 2024 outlook due to slower growth in Asia travel retail and mainland China.
A profit recovery plan is being accelerated and expanded to benefit fiscal years 2025 and 2026.
Estee Lauder
Estee Lauder
Estee Lauder Revenue by Segment
Estee Lauder Revenue by Geographic Location
Revenue by Segment
Skin Care Revenue
CapyFin.comMakeup Revenue
CapyFin.comFragrance Revenue
CapyFin.comHair Care Revenue
CapyFin.comOther Revenue
CapyFin.comRevenue by Geographic Location
The Americas Revenue
CapyFin.comEMEA Revenue
CapyFin.comAsia/Pacific Revenue
CapyFin.com Forward Guidance
The company anticipates progressively improving performance in the second half of fiscal 2024 and plans to strategically invest in consumer-facing activities. They are lowering their outlook to reflect the slower pace of recovery in net sales and margins due to incremental external headwinds.
Positive Outlook
- A return to net sales growth in the second half of fiscal 2024 is expected.
- Full-year gross margin expansion is primarily driven by strategic price increases, discount reductions, and lower obsolescence charges.
- Progressive operating margin improvement is expected throughout the second half of fiscal 2024.
- The company will continue to strategically invest in consumer-facing activities to support recovery and share gains.
- Completion of the first manufacturing facility in Asia, located in Japan, to support the regionalization of the supply chain in the Asia/Pacific region.
Challenges Ahead
- Reported net sales are forecasted to decrease between 11% and 9% for the second quarter of fiscal 2024.
- Organic net sales are forecasted to decrease between 10% and 8% for the second quarter of fiscal 2024.
- The potential risks of further business disruptions in Israel and other parts of the Middle East are expected to have a dilutive impact to net earnings per share of $0.08 for Q2 2024.
- Adjusted diluted net earnings per common share are expected to decrease between 33% and 25% for the full year on a constant currency basis.
- The expected growth rate of overall prestige beauty has slowed in mainland China.
Revenue & Expenses
Visualization of income flow from segment revenue to net income