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Estee Lauder Forecasts Lower Sales Amid Investment Surge
5 Feb
Summary
- Company forecasts annual sales and profit below expectations.
- Increased marketing spend and tariffs impact financial outlook.
- Strategy focuses on product innovation and luxury tier expansion.
Estee Lauder has projected that its annual sales and profit will fall slightly below current market estimates. The cosmetics manufacturer is undertaking a significant brand reset, which includes an increase in marketing expenditure.
This strategic shift aims to navigate challenges such as tariff-related pressures. The company anticipates a $100 million hit to its annual profit due to tariffs, a figure consistent with previous forecasts.
Estee Lauder's 'Beauty Reimagined' strategy involves accelerating product launches, particularly in skincare, and introducing new luxury price tiers. These initiatives are coupled with intensified innovation and marketing efforts to draw in more consumers.
Financial projections indicate annual net sales growth between 3% and 5%, with the midpoint below the analyst estimate of 4.3%. Adjusted earnings per share are expected to range from $2.05 to $2.25, with the midpoint also trailing analyst predictions.
