Estee Lauder’s revenue slides 9% in Q1 as COVID-19 hits makeup sales
- Estee Lauder tops analysts' estimates for profit and sales in the first quarter.
- The U.S. company raises its quarterly dividend by 10% to 41 pence per share.
- Estee Lauder forecasts up to £1.24 of adjusted per-share earnings in Q2.
The Estee Lauder Companies Inc. (NYSE: EL) published its financial results for the fiscal first quarter on Monday that topped analysts’ estimates for profit and sales. The company said that demand for makeup took a hit in recent months due to the ongoing Coronavirus pandemic. But skincare sales helped offset this decline in Q1.
On a year to date basis, shares of the company are more than 6% up in the stock market. Estee Lauder has recovered more than 50% since March. Here’s what you need to know about the capital markets.
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Estee Lauder’s Q1 financial results versus analysts’ estimates
Despite robust performance in the first quarter, Estee Lauder gave downbeat guidance for earnings in Q2 on Monday. But the U.S. company raised its quarterly dividend by 10% to 41 pence per share.
Estee Lauder said that its net income in the quarter that concluded on 30th September printed at £404.54 million that translates to £1.10 per share. In the comparable quarter of last year, its net income was reported at a higher £460.23 million or £1.25 per share.
Adjusted for one-time items, the owner of prominent brands like MAC Cosmetics earned £1.11 per share in the recent quarter versus a lower 69.61 pence per share expected, as per FactSet.
In terms of sales, the New York-based company registered a 9% annualised decline in Q1 to £2.75 billion. FactSet Consensus for sales in the first quarter stood at £2.68 billion. Estee Lauder said in August that it will cut up to 2,000 jobs to cushion the economic blow from the COVID-19 crisis.
Other prominent figures in Estee Lauder’s earnings report
Estee Lauder said that it generated £1.58 billion of sales from skincare that marks a 10% year over year growth. Sales from makeup tanked 32% in the recent quarter to £756.48 million. At £314.04 million, fragrance sales were also 12% lower than last year while haircare sales remained almost unchanged at £105.20 million.
FactSet Consensus for sales from these four segments stood at £1.46 billion, £960 million, £315.82 million, and £96.45 million, respectively. For the fiscal second quarter, Estee Lauder now forecasts up to £1.24 per share of adjusted earnings. According to FactSet, analysts are expecting a higher £1.34 of adjusted EPS in the current quarter.
At the time of writing, Estee Lauder is valued at £61.37 billion and has a price to earnings ratio of 117.83.