Estee Lauder (EL) Earnings Show Muted Outlook for FY2025

Q4 Performance Analysis

Estee Lauder’s (EL) Q4 2024 performance demonstrated resilience with net sales increasing by 7% year-over-year to $3.87 billion. This growth was supported by organic sales, which rose by 8%, attributable to strength across all product categories.

However, weakness in the mainland China and North America markets emerged as significant concerns. Inflationary pressures in North America and a cautious consumer sentiment in China are contributing factors to this trend.

Regional Performance Breakdown

• E.M.E.A Region: Experienced organic sales growth of 32%, driven by prosperity in Asia travel retail and priority emerging markets.
• Asia Pacific: Reported a 4% decline in organic sales, largely due to decreased prestige beauty demand in mainland China.
• Americas: Organic sales dropped by 5%, primarily from a competitive North American landscape.

FY2025 Outlook and Challenges

For FY2025, Estee Lauder forecasts that the global prestige beauty market will only grow by 2-3%. Weak consumer sentiment and competitive pressures particularly in mainland China and Asia travel retail are anticipated to adversely affect Estee Lauder’s performance.

Expectations for the first quarter of FY2025 include a 3-5% decrease in net sales year-over-year, alongside adjusted EPS ranging between $0.01-0.09.

Overall, Estee Lauder's results reflect significant challenges ahead, with sales for the year forecasted to show little change—projected to remain flat or see a modest decline.