Estee Lauder provides assumptions for FY25 outlook

The company has reflected the following assumptions in its fiscal 2025 full-year outlook: A stronger double-digit net sales decline in the Company’s global travel retail business in the fiscal 2025 fourth quarter compared to the decline in the third quarter, reflecting the impacts from retailer shifts in strategies toward more profitable duty-free business models in both Korea and mainland China as well as weak consumer sentiment and conversion from Chinese consumers. This decline also reflects a difficult comparison to the prior-year period due to the resumption of replenishment orders in the second half of fiscal 2024 as well as the Company’s strategic decision to reduce its exposure to reseller activity. High-single digit organic net sales decline in Asia/Pacific for fiscal 2025, primarily driven by ongoing subdued consumer sentiment from Chinese consumers and the impact of the Company’s strategic exit of Dr.Jart+ from the travel retail channel in Korea. Adjusted gross margin of approximately 73.5%. An effective tax rate of approximately 38%. Adjusted EPS decline, primarily due to the challenges in the Company’s global travel retail business and Asia/Pacific geographic region. No further material adverse impacts from currently enacted tariffs, including consumer sentiment. The Company continues to monitor the effects of the global macro environment, including the risk of recession; currency volatility; inflationary pressures; supply chain challenges; social and political issues; competitive pressures; legal and regulatory matters, including the imposition of tariffs and sanctions; geopolitical tensions; and global security issues. The Company is also mindful of inflationary pressures (including those caused by tariffs) on its cost base and is monitoring the impact on consumer preferences, the impact of changes being made in the organization, including those related to Beauty Reimagined and the PRGP, as well as the potential impact of changes expected to be made as part of the PRGP on suppliers, retailers and others, and challenges relating to successfully outsourcing select services. In the Company’s outlook, it has made assumptions regarding these internal and external factors and challenges. Declines in net sales and profitability have, and may continue to, adversely impact the goodwill and other intangible assets associated with the Company’s brands, as well as long-lived assets, potentially resulting in impairments.