ESTEE Lauder on Wednesday (Nov 1) cut its annual profit forecast and said it expects a drop in annual sales, as the MAC lipstick maker struggles with a slower-than-anticipated recovery in its Asia travel retail business. Shares of the New York-based company were down about 15 per cent in premarket trading.

Major global companies including European peer L’Oreal have flagged ongoing challenges to their travel retail businesses in Asia, particularly China, as the world’s second-largest economy struggles to revive domestic demand post-pandemic.

Last quarter, Estee had said the recovery in Asia travel retail – sales made at airports or travel destinations like Korea and China’s Hainan – has been under pressure with retail sales trends turning negative in May and June.

Estee makes about 36 per cent of its annual revenue from the Asia-Pacific region.

The company now expects full-year 2024 adjusted profit per share between US$2.17 and US$2.42, compared with its prior forecast of US$3.50 to US$3.75.

Estee now expects full-year 2024 sales to decrease 2 per cent to an increase of 1 per cent, compared with the previous forecast of an increase between 5 per cent and 7 per cent. REUTERS

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