Estee Lauder’s 1st quarter revenues are down 9% as COVID-19 reaches makeup sales.


Estee Lauder exceeds analysts’ estimates for profit and sales in the first quarter.
The US company is increasing its quarterly dividend by 10% to 41 pence per share.
Estee Lauder forecasts adjusted earnings per share of up to 1.24 pounds in the second quarter.

The company Estee Lauder Companies Inc. (NYSE: EL) on Monday announced its financial results for the first quarter, which exceeded analysts’ estimates for earnings and revenues. The company said that demand for makeup has taken a hit in recent months due to the ongoing coronavirus pandemic. However, skin care sales helped to offset this decline in the first quarter.

In the year to date, the company’s shares have risen by more than 6% on the stock market. Estee Lauder has recovered by more than 50% since March. Here is what you need to know about the capital markets.

Estee Lauder’s Q1 financial results compared to analysts’ estimates

Despite the robust performance in the first quarter, Estee Lauder issued a weak forecast for second quarter earnings on Monday. However, the US company increased its quarterly dividend by 10% to 41 pence per share.

Estee Lauder said that its net profit for the quarter ended September 30 was printed at £404.54 million, or £1.10 per share. For the same quarter last year, net income was higher at £460.23 million or £1.25 per share.

Adjusted for non-recurring items, the owner of prominent brands such as MAC Cosmetics earned £1.11 per share in the final quarter, while FactSet expects a lower amount of £69.61 per share.

In terms of revenue, the New York-based company saw an annualized decline of 9% to £2.75 billion in the first quarter. The FactSet consensus for first quarter revenue was £2.68 billion. Estee Lauder said in August that the company will cut up to 2,000 jobs to cushion the economic blow of the COVID 19 crisis.

Other prominent figures in Estee Lauder’s earnings report

Estee Lauder said she had £1.58 billion in sales of skincare products, representing 10% growth over the previous year. Make-up sales increased by 32% to £756.48 million in the final quarter. Perfume sales were also 12% lower than last year at £314.04 million, while hair care sales were almost unchanged at £105.20 million.

The FactSet Consensus for sales from these four segments was £1.46 billion, £960 million, £315.82 million and £96.45 million respectively. For the second quarter of the fiscal year, Estee Lauder now forecasts an adjusted profit of up to £1.24 per share. According to FactSet, analysts expect higher adjusted earnings per share of £1.34 for the current quarter.

At the time of writing, Estee Lauder is valued at 61.37 billion pounds sterling and has a price-earnings ratio of 117.83.


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