Estée Lauder forecast annual sales and profit slightly below estimates on Thursday, as the cosmetics maker navigates a brand reset with increased marketing spend while it navigates tariff-related pressures.
Shares fell about 9 percent in premarket trading after it forecast third-quarter margins to contract 50 basis points due to stepped-up investments in product innovation and tariff pressures.
The company, which is undergoing a turnaround under its CEO Stephane de La Faverie, flagged a $100 million tariff hit on annual profit, reiterating its forecast from October 2025. It said it has been reducing inventory and promotions, among other actions, to mitigate rising costs.
Estée’s ‘Beauty Reimagined’ strategy has been accelerating launches in categories such as skincare, rolling out new luxury price tiers, and boosting innovation and marketing efforts to attract more consumers.
The cosmetics maker expects annual net sales to be in the range of 3 percent to 5 percent, the midpoint of which is below analysts’ estimates of 4.3 percent rise, according to data compiled by LSEG.
The midpoint of its full-year adjusted earnings per share target of $2.05 to $2.25 also came in below estimates of $2.16 per share.
The company posted quarterly sales of $4.23 billion, in line with analysts’ estimates.
By Anuja Bharat Mistry
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