Aug 18 (Reuters) – Estee Lauder on Thursday announced its outlook for full-year 2023 revenue and adjusted profit, which came in below analysts’ expectations due to the impact of coronavirus restrictions. coronavirus in China, its main market.
China, which recently relaxed its zero-COVID policy, has implemented health measures that have led to a build-up of unsold inventory for businesses in the country as cautious consumers stay away from shopping areas. crowded.
The company also faces last week’s extension of lockdowns in China’s tourist hub of Hainan, which affects sales of its brands such as Clinique and La Mer, for the fiscal year that started July 1.
The group has been plagued by weak sales in China for some time. In the fourth quarter, the Asia-Pacific region generated $1.01 billion (€1.0 billion), down 23% year-on-year.
The stock was down around 1% in pre-market trading, after the owner of the MAC brand said it expects results to be below analysts’ estimates for the current quarter as well.
But analysts, who predict a short-term impact due to restrictions in China, are optimistic about demand for beauty products in the region over the long term.
Meanwhile, strong demand from affluent consumers in the Americas boosted the company’s sales in the fourth quarter.
Estee Lauder expects its fiscal year 2023 net sales to rise 3% to 5%, while analysts on average expect a 7.6% rise, according to an IBES consensus from Refinitiv.
A strong U.S. dollar will also impact its full-year results, the group said, which also forecasts its adjusted earnings per share for 2023 to increase between 5% and 7%, which is below estimates for a gain of 10%. .5%. (Reporting Ananya Mariam Rajesh in Bangalore; French version Elena Vardon, editing by Kate Entringer)