ESTEE Lauder Companies (ELC) said that first-quarter sales fell 10% to $3.52b, due to a slower-than-expected recovery of prestige beauty in mainland China, as well as a poor performance from the company's Asia travel retail business, reported Vogue Business.
By region, Europe, Middle East, and Africa saw the biggest decline.
Net sales fell 27%, with global travel retail sales down double digits, due to ELC resetting retailer inventory levels.
It plans to reduce excess and obsolete inventory through its regionalised supply chain network, particularly across Asia.
Sales in Asia-Pacific decreased by 3%, thanks to a slowdown in overall luxury beauty in mainland China, with the decline partially offset by increases in other countries within the region including Hong Kong, Japan and Australia.
The American market rose 6%, with gains in North America and Latin America.
CEO Fabrizio Freda also told investors that the Israel-Hamas war had impacted operations.
"We are reflecting the risks of business disruptions in Israel and other parts of the Middle East," commented Freda, with skincare as a category hit the hardest.
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