FOX Business’ Kristina Partsinevelos reports on beauty companies trying to compensate for losses in the cosmetics industry due to the outbreak of coronavirus.
Estée Lauder plans to lay off 1,500 to 2,000 employees and close 10 to 15 percent of its 1,500 independent stores worldwide, the makeup company announced Thursday.
The decision is part of the retailer’s Post-COVID Business Acceleration Program, which aims to restore companies after the pandemic hurt its own business, although its online business kept sales stable.
The store’s layoffs and closures are expected to save $ 300 million to $ 400 million in taxes each year, the company said.
| Ticker | Security | Last | Change | Change% |
|---|---|---|---|---|
| EL | ESTEE LAUDER | 198.27 | -14.23 | -6.70% |
“Fiscal 2020 was a year without parallel because we delivered record sales and exceptionally strong adjusted growth of EPS in our first half and navigated with agility due to an unusual pandemic in our second half,” Estée Lauder President Fabrizio Freda said in a statement.
He added that it “proved multiple engines of the company’s growth strategy very effectively”, and the “Estée Lauder brand grew double digits for the third year in a row.”
Estée saw a 4 percent reduction in net sales for its fiscal year ending June 30, according to a press release.
In the three months ending June 30, the New York company said it had a loss of $ 1.28 per share. Losses, adjusted for impairment charges and non-recurring costs, were 53 cents per share.
The results did not live up to Wall Street expectations. The average estimate of 11 surveyed researchers by Zacks Investment Research was for a loss of 19 cents per share.
The beauty product company posted revenue of $ 2.43 billion during the period, which also missed Street forecasts. Eight analysts surveyed by Zacks expected $ 2.46 billion.
For the year, the company reported a profit of $ 684 million, or $ 1.86 per share. Revenue was reported as $ 14.29 billion.
“In this new fiscal year, we remain focused on the safety and well-being of our employees and consumers. Our sense of urgency to act on our recently announced race management commitments is strong. We are entering fiscal 2021 with cautious optimism… “We expect sales trends to continue to improve every four years,” Freda said.
The Associated Press contributed to this report.
