Sign in
Sign up
Moby Premium

You are currently reading a preview of Moby Premium. To read this report in full. Please consider becoming a subscriber.

Start a free trial ➔
estee lauder kiosk

Estee Lauder & e.l.f. Beauty: Market Chaos and Bearish Outlook

consumer discretionary news Nov 01, 2023

Discover the market turmoil as Estee Lauder reports disappointing growth and e.l.f. Beauty foresees a sales slowdown.

What happened

Estee Lauder's latest results have become a major concern, missing expectations with an anemic $0.11 EPS from $3.52 billion in revenue. With costs spiraling out of control, especially in the Chinese market, the brand faces significant sales impact.

Meanwhile, e.l.f. is yet to report earnings, but data from Nielsen, shared by a Jeffries analyst, indicates a measurable slowdown in the beauty giant's sales. Projections suggest a 45% growth in tonight's earnings call compared to last year's 49%, sparking a significant selloff.

The slowdown is here

Adding to the bearish sentiment, Estee Lauder projects a potential decline in full-year revenue as persistent headwinds challenge the company's efforts to recover. This signals a possible slowdown in consumer spending within the beauty sector.

Why it matters

With many companies projecting lower Q4 earnings, this confirms the impact of the Fed's rate hikes on consumer spending. Estee Lauder faces a particularly challenging situation with unclear prospects, while e.l.f. seems to be finding a more sustainable growth level. As the market reacts, Estee Lauder dropped 15% in early trading, and e.l.f. declined by an additional 2% after a 10% tumble yesterday.