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Dec 31, 2022
Estee Lauder Q2 2023 Earnings Report
Net sales and diluted EPS decreased due to COVID-19 restrictions in mainland China and rising COVID cases, partially offset by strong organic net sales growth across developed and emerging markets globally. The company exceeded adjusted diluted EPS outlook despite incremental external headwinds.
Key Takeaways
The Estée Lauder Companies reported a 17% decrease in net sales and a 63% decrease in diluted EPS for the second quarter of fiscal year 2023. Organic net sales fell by 11%. The company exceeded its adjusted diluted EPS outlook despite challenges in mainland China due to COVID-19 restrictions.
Net sales decreased 17% and diluted EPS decreased 63%.
Organic net sales decreased 11% and adjusted diluted EPS fell 44% in constant currency.
The company exceeded adjusted diluted EPS outlook despite incremental external headwinds.
Lowering second half outlook amid volatility in travel retail.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The Company expects the remainder of the fiscal year to be volatile, including risks associated with the uncertain pace of recovery of consumers in travel retail, and pressured by the ongoing disruptions due to the evolving COVID-19 environment, inflation, supply chain disruptions, and the risk of a slowdown in certain markets globally.
Positive Outlook
- A shift in the return to growth in Asia Travel Retail and mainland China from the fiscal 2023 third quarter to the fourth quarter, reflecting the normalization of inventory levels in Hainan.
- An acceleration of retail sales in the fourth quarter of fiscal 2023 in travel retail, primarily due to the resumption of outbound Chinese traveling consumers.
- A moderate return to net sales growth in mainland China.
- Increased productive distribution throughout the year to retailers that provide new consumer reach and continued strategic entry into new countries for some of the Company’s brands.
- The mitigation of most inflationary pressures through strategic price increases, mix optimization and cost savings in other areas.
Challenges Ahead
- Risks associated with the uncertain pace of recovery of consumers in travel retail.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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