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Estee Lauder Swings to Loss and Cuts Up to 3% of Jobs

Estee Lauder swung to a wider-than-expected fourth-quarter loss and expects to cut as many as 2,000, or 3%, of its jobs worldwide.
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Estee Lauder on Thursday posted a wider-than-expected fourth-quarter loss and said it planned to cut as many as 2,000, or 3%, of its jobs as the cosmetics giant struggles to emerge from the coronavirus pandemic shutdown.

Shares of the New York company at last check were down 8.2% to $195.07.

Estee Lauder reported a net loss of $462 million, or $1.28 a share, compared with net income of $157 million, or 43 cents, in the year-earlier quarter. The adjusted loss came to 53 cents a share, wider than a FactSet survey's call for a 16-cent loss.

Sales totaled $2.43 billion, down from $3.59 billion a year earlier and short of FactSet's forecast of $2.45 billion, as Covid-19 forced store closings worldwide.

During the pandemic, the demand for skin-care and hair-care products has been more resilient than the demand for makeup and fragrance.

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Online sales growth accelerated in every region, the company said.

In addition, Estee Lauder said that it expects to eliminate about 1,500 to 2,000 positions globally, or as much as 3% of its current workforce including temporary and part-time employees.

The company also said it expected to close 10% to 15% of its freestanding stores globally, as well as certain less-productive department-store counters.

Estee Lauder said nearly all its retail stores in the Asia-Pacific region have reopened. Many stores closed for most of February through April.

Retail stores in the Europe-Middle East-Africa region have been gradually reopening through June. About 15% of the stores are still closed.

In the Americas, about 20% of stores remained closed by the end of June. Estee Lauder said it had been able to obtain raw materials and components as needed during the pandemic.