NEW YORK (TheStreet) -- It wasn't looking pretty for Estee Lauder ( (EL)) shares on Wednesday after the cosmetics and beauty brand reported a weaker-than-expected earnings outlook on slowing demand in Asian markets and individual European countries.
By late afternoon, shares had unloaded 5.5% to $65.40.
Through fiscal 2014 ending June, the New York-based company said it expects continued weakness in its beauty brands in Korea and certain European countries, such as Switzerland and France, as well as a near-term slowing of demand in China and Hong Kong.
In the Americas, Estee Lauder sees growth in the U.S., albeit at a slower pace than in 2013, while Latin America will be watched closely for signs of negative headwinds, particularly the potential devaluation of the Venezuelan bolivar.
"Continued strength overall in emerging markets more than compensated for soft results in certain European countries and solid but slowing Chinese market growth," said CEO Fabrizio Freda in a statement.
For the March-ending third quarter, net sales are forecast to grow between 10% and 11%, or approximately $2.52 billion to $2.54 billion, with foreign exchanges negatively impacting revenue by 1% to 2%. Net income is projected between 52 cents and 55 cents a share, below consensus of 63 cents a share from analysts surveyed by Thomson Reuters.
Full-year sales are expected to grow between 6% and 7%, with net income in the range of $2.80 to $2.87 a share, just shy of analysts' $2.88.
For its second quarter, Estee Lauder reported net income of $1.09 a share three cents above consensus. Revenue of $3.02 billion, though 3.1% higher year-over-year, was short expectations of $3.05 billion.