Beauty Products Provider Estee Lauder's Q4 Beats But Outlook Disappoints

Estee Lauder Companies Inc EL reported a fourth-quarter sales decline of 10% year-on-year to $3.56 billion, beating the consensus of $3.43 billion. Organic net sales decreased 8%.
Sales in the Americas increased 12% Y/Y, Europe, Middle East & Africa dropped 11%, and Asia/Pacific fell 23%.
Net sales from Skin Care fell 21%, Makeup improved 3%, Fragrance gained 16%, and Hair Care increased 2%.
Gross profit declined 14% Y/Y to $2.5 billion, with the margin contracted 390 basis points to 71%.
Operating expenses decreased 10% Y/Y to $2.5 billion while the operating expense margin was 68.8%, versus 69% last year.
Operating margin contracted 370 basis points to 2.2%, and operating income for the quarter fell 66% Y/Y to $79 million.
The company held $3.96 billion in cash and equivalents as of June 30, 2022.
Adjusted EPS of $0.42 beat the analyst consensus of $0.34.
The COVID-19 pandemic continued to disrupt the company’s operating environment globally, primarily impacting the supply chain, inventory levels, and other logistics during the year ended June 30, 2022.
Outlook: Estee Lauder sees FY23 adjusted EPS of $7.39 - $7.54, against the consensus of $7.99. Reported net sales are forecasted to increase by 3% - 5%.
For Q1, it expects adjusted EPS of $1.22 - $1.32 versus the consensus of $1.88. Reported net sales are forecasted to decrease by 10% - 8%.
Price Action: EL shares are trading lower by 0.07% at $276.33 on the last check Thursday.
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