Investing.com -- Estee Lauder Companies Inc (NYSE:EL) saw its shares plummet around 17% Tuesday after the company issued a fiscal third-quarter outlook that notably missed analyst expectations.
For the second quarter of fiscal 2025, the cosmetics giant reported earnings per share (EPS) of $0.62, well above the consensus estimate of $0.31.
Estee Lauder’s revenue for the quarter hit $4 billion, slightly ahead of the $3.98 billion expected by analysts.
By region, Americas net sales totaled $1.22 billion, down 1.5% year-over-year, in line with the $1.23 billion estimate.
EMEA sales declined 6% to $1.49 billion, matching expectations, while Asia Pacific sales fell 11% to $1.29 billion, slightly above the $1.27 billion estimate.
For the third quarter of fiscal 2025, the company said it expects EPS between $0.24 and $0.34, significantly below the consensus projection of $0.64. Q3 sales are expected to decline between 10% and 12%, falling short of the consensus projection of a 7% drop.
"We expect the FQ3 guide embeds a level of conservatism due to EL’s historical guidance pattern," Jefferies analysts led by Ashley Helgans commented.
In the earnings statement, Stéphane de La Faverie, President and CEO of Estee Lauder said:
“While we are not satisfied with our third quarter outlook, it primarily reflects weak retail sales trends in our Asia travel retail business, which deteriorated in our second quarter driven by Korea,” said Stéphane de La Faverie, President and Chief Executive Officer of Estee Lauder.
“For the third quarter, we expect overall soft retail trends to persist in Asia travel retail, significantly pressuring our organic net sales despite the improvement we made with in-trade inventory levels in the first half of fiscal 2025, which we intend to maintain around current levels.”