Estee Lauder falls deeper into the red – Tariffs burden outlook

8/24/2025, 5:48 PM

Estee Lauder reports higher loss, weak outlook, and relies on price increases, while tariffs massively impact profits.

Eulerpool News Aug 24, 2025, 5:48 PM

Estee Lauder significantly expanded its loss in the fourth quarter of the 2025 fiscal year and simultaneously presented a weak forecast for the current year. The US cosmetics group, known for brands like MAC, Smashbox, and Jo Malone, expects an impact of around 100 million US dollars on its earnings due to new tariffs.

In the quarter ending in June, the company recorded a net loss of $546 million or $1.51 per share, compared to $284 million in the same period last year. This was particularly affected by a restructuring and impairment charge of $527 million and a tax adjustment in the US of $172 million.

Adjusted for special effects, earnings were 9 cents per share as per FactSet's expectations. However, revenue fell by 12% to $3.41 billion, slightly exceeding analysts' estimates of $3.39 billion.

The greatest weaknesses were evident in the skincare business (-16%) and the makeup segment (-11%), both heavily affected by weak consumer demand in Asia. The hair care sector also contracted by 15%, while the fragrance business brought some stability with a 4% increase.

For the current fiscal year 2026, the group forecasts revenue growth of 2% to 5%. Earnings per share are expected to be between $1.63 and $1.87, adjusted for special effects between $1.87 and $2.07. Analysts had expected an average of $2.20 per share.

To counteract the pressures, Estee Lauder wants to consider price increases and focus more on efficiency programs and trading advantages. The stock temporarily fell by up to 11% in pre-market trading after the figures were presented and was last quoted 7.2% weaker at $83.40, despite a price increase of 41% over the past three months.

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