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by Ananya Mariam Rajesh
(Reuters) – Estee Lauder shares tumbled on Wednesday after the company lowered its full-year revenue and profit guidance, as investors expected better results after the easing of restrictions related to the COVID-19 in the world and in China.
On the New York Stock Exchange, the title plunged 20.6% to 194.64 dollars at 1:42 p.m. GMT.
The American beauty products group reported a slower-than-expected recovery in retail travel products in Asia and the major market of China.
In contrast, its European rivals LVMH and L’Oreal saw sales increase in the first quarter, boosted by a rebound in demand in the Chinese market.
The forecast was “the last thing” Wall Street expected, Barclays analyst Lauren Lieberman said in a note.
Statements about retail travel product sales in Asia raise doubts about the degree of “control or visibility” the company has over its end sales through this channel, she added.
Even as China eased pandemic-related restrictions, the company spent January 2023 under pressure from weak retail sales and retailer destocking due to an increase in COVID-19 cases.
Estée Lauder expects full-year 2023 net sales to decline 10-12%, compared to previously forecasting a 5-7% decline.
The company also expects its adjusted earnings per share to fall 50-51%, down from a 27-29% drop it previously expected.
(Report Ananya Mariam Rajesh in Bangalore, Nathan Vifflin, editing by Kate Entringer)
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