Estee Lauder forecasts weaker annual sales, profit on slow recovery in Asia travel retail By Reuters

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(Reuters) -Estee Lauder projected full-year net sales and profit below market expectations on Friday, signaling a slower-than-expected recovery in its travel retail business, mainly in Asia, and easing demand in the United States.

Major companies across the globe have taken a cautious stance regarding their bets on a rebound in China, as the world’s second-largest economy struggles to revive demand and battles rising youth unemployment rates and a high cost of living.

Analysts have said the drop in consumer demand in China and a slow recovery in Asia travel retail – sales made at airports or travel destinations like Korea and China’s Hainan – could impact luxury companies like Estee, which makes about 30% of its annual revenue from the Asia Pacific region.

The cosmetics maker expects full-year 2024 sales to rise between 5% and 7%, compared with analysts’ estimate of an 8.8% increase, according to Refinitiv IBES data.

The MAC brand owner expects full-year 2024 adjusted profit per share to be between $3.50 and $3.75, compared with analysts’ expectation of $4.83.

The company’s net sales rose to $3.61 billion in the fourth quarter, from $3.56 billion a year earlier. Analysts had expected revenue of $3.47 billion.