MAC lipstick maker Estée Lauder forecast 2025 profit and sales below estimates as the global beauty market struggles with slowing demand, and said long-time CEO Fabrizio Freda was retiring.
The company said sales in China decreased primarily due to ongoing softness in overall prestige beauty segment as spending during holiday and key shopping moments remained strained.
European peer L'Oréal, which missed sales expectations for the most recent quarter, also flagged that the global beauty market was growing slower than expected, and highlighted the lack of a rebound in the China market.
Turnaround Plan
The news of long-time CEO retiring comes amid a turnaround plan and on the heels of Estée's chief financial officer Tracey Travis stepping down after a 12-year stint.
In July, Estée said insider Akhil Shrivastava will succeed Travis as the company's finance chief.
Freda, 66, joined Estée in 2008 as president and chief operating officer and was later named the company's CEO.
Estée said the board was considering internal and external candidates as part of its CEO succession planning.
Until a successor is appointed, Freda will continue to lead and oversee the company's strategic, financial and investment priorities, Estée said.
Outlook
The company expects fiscal 2025 sales to be between a fall of 1% and a 2% rise, compared with an analyst estimate of a 6.43% rise, according to LSEG data.
Estée expects annual adjusted profit per share between $2.75 and $2.95, compared with analysts' expectations of $3.96.
The company's adjusted quarterly net sales rose to $3.87 billion (€3.5 billion) from $3.63 billion (€3.3 billion) a year earlier. Analysts had estimated $3.81 billion (€3.5 billion).
Freda commented, “While our sales and profit outlook for fiscal 2025 is disappointing, this year we will make important strides, as we implement our strategy reset to continue rebalancing regional growth, deliver improved annual profitability, and strengthen go-to-market and innovation capabilities to elevate our execution in response to a more competitive market.
“These efforts, coupled with the strengths of our brands, product portfolio, and talented teams around the world, will position us to both outperform prestige beauty in fiscal 2026 and accelerate profitability expansion.”
News by Reuters, additional reporting by ESM.
