(Reuters) – Estee Lauder Cos Inc forecast a bigger drop in full-year sales and profit on Wednesday, hurt by a slow recovery in major market China and reduced inventory levels by retailers in the United States.
Shares of the New York-based company were down about 8% in premarket trade.
Even though China has relaxed pandemic-related restrictions, Estee had flagged uncertainty about a recovery in the region due to an increase in COVID-19 cases as people step out of their homes after long periods of lockdowns.
The MAC lipstick maker’s sales also witnessed an impact from U.S. retailers tightening inventories of its products on worries of a slowdown in demand as consumers turn increasingly cautious on the back of rising interest rates and living costs.
The company expects full-year 2023 net sales to fall between 10% and 12%, compared with the prior forecast of a 5% and 7% decrease.
The company expects adjusted profit per share to fall between 50% and 51%, compared with the prior forecast of a decrease between 27% and 29%.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli)
