Disappointing Estée Lauder results reference future layoffs

The Estée Lauder Companies (including brands like Clinique, Bobbi Brown, The Ordinary, La Mer and Estée Lauder itself), announced its Q2 2024 financial results on February 5^th.

The none-too-pretty results included some grim sales figures and disappointing EPS for investors - but also hinted at a much more bare-bones rest of 2024, which include yet more of the layoffs several companies have posted recently.

A disappointing make-up

The company had a disappointing second quarter, with net sales of $4.28 billion as of December 31^st, representing a decline of 7% from $4.62 billion in the prior-year period. Organic sales also fell 8%, although this was in line with market expectations for the brand.

The Estée Lauder Companies reported net earnings of $313 million, compared with net earnings of $394 million in the prior-year period. The company’s diluted net earnings per common share was $.87, compared with $1.09 reported in the prior-year period.

Furthermore, the fiscal 2024 second quarter impact of business disruptions in Israel and other parts of the Middle East was $.02 dilutive to net earnings per common share.

Read our analysis: Estée Lauder earnings - the day of reckoning is here

Taxing times

The Company’s reported effective tax rate was 37.6% in the quarter, compared to 25.4% in the prior-year period. The company said that:

Headwinds aplenty

According to The Estée Lauder, the results were largely due to external, macroeconomic factors, like the ongoing conflict in the Middle East:

The layoffs epidemic comes to Estée Lauder

In terms of the rest of 2024, the company said in its release today of the financial results that it was “revising FY24 outlook to narrow net sales range and lower adjusted diluted EPS for tax, while reaffirming operating profitability” and that it would “further expand its profit recovery plan with the announcement of a restructuring program”.

This restructuring program is set to trim a whopping 3-5% of the companies' global workforce, beginning as soon as this coming quarter. This is what the company had to say:

To the credit of the company, the plans were specific and detailed, much to the relief of many: