(Reuters) – Estée Lauder announced on Thursday that it would abandon its outlook for the 2025 financial year after initially lowering it in August, as the group faces weak demand for luxury beauty products in major markets, notably China .
The group announced in a press release the “abandonment of the outlook for the 2025 financial year due to the growing uncertainty regarding the timetable for the stabilization of the economy”. It previously targeted sales for 2025 between -1% and +2% compared to the previous year.
The owner of the cosmetics brand MAC, who appointed Stéphane de La Faverie as new general manager on Wednesday and who decided to reduce the payment of the dividend, saw his stock fall 15% on Thursday in pre-market trading.
“We expect further strong declines in the short term for the industry in China and Asia,” said outgoing CEO Fabrizio Freda, who will give way to Stéphane de La Faverie on January 1.
The beauty sector, which has seen a slowdown in demand in China over the year, has seen customers shift away from “affordable luxury” purchases, such as lipsticks and skincare.
Estée Lauder recorded a turnover of 3.3 billion dollars (3.04 billion euros) for its delayed first quarter, down 4% compared to the previous year.
Estée Lauder’s sales in the Asia-Pacific region also fell 11%.
The group announced a quarterly dividend of 35 cents per share.
(Writing by Ananya Mariam Rajesh in Bangalore; Etienne Breban, edited by Kate Entringer)
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