Estée Lauder Set to Report Q3 Earnings Amid Financial Challenges

New York-based The Estée Lauder Companies Inc. (EL) manufactures, markets, and sells skin care, makeup, fragrance, and hair care products. With a market capitalization of $21.1 billion, it boasts a diverse portfolio of renowned brands such as Estée Lauder, MAC, Clinique, La Mer, and Jo Malone London. The company is expected to announce its fiscal Q3 earnings for 2025 before the market opens on Thursday, May 1.

Analysts’ Profit Expectations

Ahead of this announcement, analysts predict that Estée Lauder will report a profit of $0.30 per share, representing a 69.1% decrease from $0.97 per share in the same quarter last year. Historically, the company has shown a reliable pattern of exceeding Wall Street’s earnings estimates in each of the last four quarters. In Q2, EL’s EPS of $0.62 significantly outperformed predictions by 93.8%.

Outlook for Fiscal 2025 and 2026

For fiscal 2025, analysts also estimate that EL will report an annual profit of $1.35 per share, down 47.9% from $2.59 in fiscal 2024. However, they expect earnings per share (EPS) to rebound in fiscal 2026, anticipating a growth of 65.9% year-over-year, bringing the estimate to $2.24.

Underperformance Compared to Market Indices

Over the past 52 weeks, EL’s shares have declined by 60.2%. This performance falls short compared to the S&P 500 Index’s increase of 8.2% and the 6.7% rise of the Consumer Staples Select Sector SPDR Fund (XLP) during the same period.

Impact of Recent Earnings Release

On February 4, EL’s shares fell sharply by 16.1% following its Q2 earnings announcement. Despite reporting strong adjusted EPS of $0.62 and revenue of $4 billion, net sales declined 6.4% year-over-year. This downturn was largely influenced by an 11.6% decrease in skincare sales and lackluster performance in both makeup and hair care segments. The company cited a challenging retail environment in the Asia-Pacific region and ongoing weakness in travel retail, particularly due to reduced consumer sentiment in China. Furthermore, adjusted EPS fell 29.5% from the previous year’s quarter, and EL projects a 10% to 12% decline in Q3 sales and an expected drop in adjusted EPS of 69% to 79%, estimating a range of $0.20 to $0.30 per share.

Wall Street Analysts’ Consensus

Wall Street shows caution regarding EL’s stock, with an overall “Hold” rating among analysts. Out of 27 analysts covering the stock, three recommend a “Strong Buy,” one suggests a “Moderate Buy,” and 23 advocate for a “Hold” rating. The mean price target for EL stands at $71.04, suggesting a potential upside of 21.1% from current levels.

On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.