Estee Lauder (EL) Stock Heads Lower on Disappointing Earnings

Advertisement

Estee Lauder Companies Inc (NYSE:EL) posted weak fiscal fourth-quarter results on Friday.

Estee LauderThe company reported revenue of $2.65 billion, narrowly missing the consensus estimate of $2.66 billion. Lower foot traffic in the Americas, as well as a declining tourist presence in its stores led to its sales miss.

Estee Lauder earned 43 cents per share over the period, excluding certain items. Wall Street projected earnings of 40 cents per share for the quarter.

In the Americas, the skincare and perfume retailer grew 1.4% year-over-year to $1.1 billion, marking its slowest growth in four quarters. CEO Fabrizio Freda pointed to social and political problems around the world causing volatility in the market, including the windfall that is still occurring from the Brexit, as well as the unpredictable repercussions of the U.S. presidential election.

There was a decreased demand for Estee Lauder’s skin care products, including its Clinique brand. Sales were disappointing in the Asia-Pacific region, especially in Hong Kong.

Earnings guidance for the company’s fiscal 2016 are slated to be between $3.38 and $3.44 a share, the company reported. Wall Street had hoped for earnings of $3.53 a share.

Estee Lauder is in the midst of a restructuring process that could result in 1,200 employees losing their jobs due partially to slowing foot traffic. The company will use these funds to improve its research and development segment, as well as to update its technology.

Freda believes that the company’s diverse portfolio in the global scale positions it to become more flexible for years to come.

EL shares slipped 3.4% Friday.

More From InvestorPlace:


Article printed from InvestorPlace Media, https://investorplace.com/2016/08/estee-lauder-el-stock/.

©2024 InvestorPlace Media, LLC