Estée Lauder posts drop in Q3 sales and profit

The Estée Lauder Companies Inc. reported net sales of 3.75 billion dollars for its third quarter ended March 31, 2023, a decline of 12 percent from the prior-year period. Organic net sales fell 8 percent, primarily driven by Asia travel retail in Hainan and Korea.

The company reported net earnings of 156 million dollars compared to 558 million dollars in the prior-year period. Diluted net earnings per common share was 43 cents compared with 1.53 dollars reported in the prior-year period. The company’s adjusted diluted net earnings per common share declined 75 percent to 47 cents, decreasing 74 percent in constant currency.

The company said in a statement that partially offsetting the pressures affecting the Company’s Asia travel retail business, organic net sales grew in nearly every market, including the developed markets of the United States, the United Kingdom and Hong Kong, and in emerging markets globally. The fragrance category grew double digits.

Commenting on the trading update, Fabrizio Freda, the company’s president and CEO said in a release: “In the context of a quarter which we anticipated to be challenging, we are pleased to have delivered the high-end of our outlook for the third quarter of fiscal 2023.”

For the nine month period, the company reported net sales of 12.30 billion dollars, a 13 percent decrease, while organic net sales decreased 8 percent compared to the prior year period.

Net earnings were 1.04 billion dollars and diluted earnings per share were 2.88 dollars. In the prior nine months, the company reported net earnings of 2.34 billion dollars and diluted earnings per share of 6.39 dollars.

For fiscal 2023, the company expects reported net sales to decrease between 12 percent and 10 percent versus the prior-year period. Organic net sales are forecasted to decrease between 7 percent to 5 percent.

Reported diluted net earnings per common share are projected to be between 2.62 dollars and 2.76 dollars and adjusted diluted net earnings per common share are projected to be between 3.29 dollars and 3.39 dollars. Adjusted diluted earnings per common share are expected to decrease between 51 percent and 50 percent on a constant currency basis.