Estée Lauder Companies Inc. Reports First Quarter Fiscal 2025 Financial Results
The Estée Lauder Companies Inc. (NYSE: EL) has announced its financial results for the first quarter ending September 30, 2024. Below is a detailed examination of the company's performance during this period.
Key Financial Metrics
| Metric | Q1 2025 | Q1 2024 | Year-over-Year Change |
|---|---|---|---|
| Total Revenue | $3.36B | $3.52B | -4% |
| Net Income / Loss | -$156M | $31M | - |
| EPS (Diluted) | -$0.43 | $0.09 | - |
| Adjusted EPS (Diluted) | $0.14 | - | 7% (constant currency) |
Despite a decline in overall sales driven by weak consumer sentiment in China and lower sales in Asia travel retail, the company managed a 7% increase in adjusted diluted EPS in constant currency, aided by a strategic Profit Recovery and Growth Plan.
Revenue Performance by Segment
| Segment | Q1 2025 Revenue | Change |
|---|---|---|
| Skin Care | Decrease | -8% |
| Makeup | Decrease | -2% |
| Fragrance | Decrease | -1% |
| Hair Care | Decrease | -6% |
The skin care segment was hit hardest due to challenges in Asia and inventory pressures. However, growth in Japan and EMEA markets somewhat mitigated this decline. Notably, Clinique in makeup saw double-digit growth globally.
Key Developments and Operational Highlights - Talcum Litigation Settlements: $159 million in charges related to settlement agreements, addressing about 70% of outstanding cases. - Restructuring Program: $106 million charges as part of the Profit Recovery and Growth Plan. - Strategic Product Launches: Successful launch of BALMAIN Beauty and expansion of the luxury fragrance portfolio.
Executive Comments Fabrizio Freda, President and CEO, emphasized successful strategic resets led to gross margin improvements and promising early outcomes for innovative new product lines. Despite near-term headwinds in China, Freda expressed confidence in the long-term potential of recent economic measures.
Dividend and Share Repurchase Program The dividend was reduced to $0.35 per share to create financial flexibility. There was no announcement regarding a share repurchase program.
Forward Guidance The company has withdrawn its full fiscal 2025 outlook, citing uncertainty in China and pending leadership changes. Only a Q2 2025 outlook is provided with expected sales decline between 8% to 6% year-over-year.
Stock Price Movement Following the earnings release, the stock saw a decline, with a post-event change of -1.80%.
The Estée Lauder Companies stand at a critical juncture, balancing strong innovation and product growth against macroeconomic challenges and strategic adjustments.
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