Estée Lauder is expecting a smaller decline in annual sales than anticipated, thanks to resilient demand for its skincare and fragrance products.
In the U.S., the company is benefitting from continued demand from wealthier consumers who are indulging in smaller purchases, such as fragrances and lipsticks, while they hold off on buying big-ticket items. And in China, the end of lockdowns and travel restrictions is showing promising signs, with sales expected to rebound.
In 2023, the company expects net sales to decline between 5% and 7%, lower than its previous projection of 6% and 8%, as the revival of air travel in the Asian market and demand in mainland China will likely spur sales, according to Reuters.
Considering those factors and the impact of a strong U.S. dollar, the company now expects its adjusted profit per share to fall by 27% to 29%, compared to its previous forecast of a 19% to 21% decline.
The New York-based company’s shares were down 3% in premarket trading.
In November last year, the company entered into an agreement to buy Tom Ford for $2.8 billion, adding a new line of beauty products and apparel to its portfolio. The deal was the latest in a series of acquisitions Estée Lauder has made recently, including its $1 billion acquisition of Ordinary skincare brand owner Deciem.