The Estée Lauder Companies Inc. (NYSE: $EL) is a leader in the manufacture, marketing, and sale of skincare, makeup, hair care, and fragrance products. Its products are available in over 150 nations and territories under well-known brands such as Origins, Bobbi Brown Cosmetics, Aramis, and TOM FORD.
The Estée Lauder Companies Inc. Earnings Report
In its most recent quarterly earnings report for fiscal Q1 2024, The Estée Lauder Companies Inc. reported net sales of $3.52 billion, a 10% decline from the $3.93 billion reported in the same period last year. It also revealed that organic net sales were down 11%.
The company blamed pressure on its Asia travel retail business and headwinds from the slow post-lockdown recovery in mainland China. However, organic net sales growth in the US and other markets in the Asia-Pacific region, particularly Japan and Hong Kong, helped offset the losses.
Additionally, the company experienced growth in Europe, the Middle East, and Africa, led by Germany and the UK. Organic net sales growth in Makeup and Fragrance partially offset losses in the Skin Care category.
The company reported an EPS of $0.11, against an estimate of -$0.20, beating the analysts’ estimate by $0.31. Estée Lauder has beaten analysts’ EPS estimates 75% of the time in the past four quarters. Its reported revenue of $3.52 million missed analysts’ targets by $30 million.
In the Q1 2024 report, the company said that while it had delivered better-than-expected results for the quarter, it was lowering its 2024 FY outlook.
They blamed it on incremental external challenges and slowed growth in prestige beauty in the Asia travel market and mainland China. Additionally, it noted the risk of business disruption in parts of the Middle East and Israel.
Estée Lauder (EL) Stock Performance
Soon after the release of the earnings report, EL stock sank to a six-year low due to the lowered FY 2024 outlook. Year-to-date, the stock has lost 55.61%, while it has lost 40.71% of its value in the past 12 months. However, as of 12:37 PM EDT, November 2, 2023, the stock was up 7.01%. It was trading at $111.84 per share.
Stock Forecast
Analysts give the Estée Lauder Companies stock an average price target of $163.67, an upside of around 46.15%. The analysts give a high forecast of $224.00 and a low of $115.00.
Should You Buy Estée Lauder Companies
Stock market analysts give EL stock a moderate buy rating. Due to the downgrade performance outlook in its recent earnings report, some analysts have lowered their price target for the stock.
Additionally, the stock has performed dismally year-to-date, dropping over 55% of its value. However, it is still worth watching closely due to its dominant market position.
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