US cosmetics and perfume maker Estee Lauder Cos. has posted a net loss for the second quarter of fiscal 2025 and announced plans to restructure and cut up to 7,000 jobs.
In the October-December quarter, the company posted a net loss of $590 million, or $1.64 per share, versus net income of $313 million ($0.87 per share) a year earlier. Adjusted earnings fell to 62 cents per share from 88 cents per share. Revenue fell 6% to $4.004bn.
The outlook for companies trading globally has become even tougher in recent days as Donald Trump launched his promised programme of import taxes. However, tariffs aimed at Canada and Mexico were suspended at the last minute.
Still, the results were better than expected. Analysts surveyed by FactSet on average estimated the company’s adjusted earnings at 32 cents per share on revenue of $3.977 billion. Estee Lauder itself three months ago planned to get adjusted earnings in the range of 20-35 cents per share, and also expected a 6-8% decline in revenue.
Sales of skin care products fell 12% (to $1.921 billion), decorative cosmetics – 1% (to $1.15 billion), hair care products – 8% (to $159 million) in the last fiscal quarter. Perfume sales were up 1% to $744 million.
Estee Lauder declared a quarterly dividend of 35 cents per share on March 17. Closing of the shareholder register will take place on February 28. For the third fiscal quarter, the company expects adjusted earnings to be in the neighbourhood of 20-30 cents per share, with a potential 10-12% drop in revenue.
Estee Lauder restructures “to restore sustainable sales growth”
Estee Lauder announced it intends to restructure “to restore sustainable sales growth and achieve stable double-digit adjusted operating margins over the next several years,” according to the statement. Among other things, the plan involves cutting between 5,800 and 7,000 jobs, reorganising and streamlining certain areas and processes, and outsourcing certain services.
Over the past three months, Estee Lauder’s capitalisation has risen by almost 27% (to $29.7bn), while the S&P 500 stock index has added about 5%.
Estee Lauder produces perfume and cosmetic products of more than 20 brands, including products under the same name, as well as under the Origins, Clinique, Tom Ford Beauty, Kilian Paris brands. The geography of sales covers about 150 countries, and the company employs 62,000 people.
