CAC 40: L’Oréal falls on the stock market after Estée Lauder’s disappointing forecasts


The world’s number one cosmetics company is suffering from the lowered outlook of its competitor, Estée Lauder. The latter now expects revenues to decline by 6 to 8% for the year, against a previous growth forecast of 3 to 5%. After the announcement of this warning, the L’Oreal share recorded the largest drop in the CAC 40 by mid-day on Wednesday.
The American cosmetics group Estée Lauder expects its first half results to be negatively impacted by the Covid-related restrictions affecting the travel sector in Asia, particularly in mainland China. Also at issue is a negative dollar effect and the end of certain licensing agreements. As a result, its sales are expected to decline by 17 to 19% for its current quarter compared to the same period last year. For its part, the adjusted earnings per share is expected to be between 5.25 and 5.40 dollars, compared to a previous range of 7.39 dollars to 7.54 dollars.
Chinese confinements affect Estée Lauder, which drags L’Oréal down
After the announcement of this disappointing outlook, L’Oreal suddenly stalled in the middle of the day and lost nearly 2%, to 312.20 euros, the biggest drop in the Cac 40.
The cosmetics group’s share price was weighed down by the more than 8% plunge of Estée Lauder on Wall Street, after the announcement of disappointing forecasts for the second quarter and for the whole year. The group is also dragging down Coty, listed in New York.
The drop in Estée Lauder’s second quarter sales reflects the negative impact of stricter inventory management in travel retail due to the drop in traffic caused by health restrictions (30% of sales are made in China), a 7% decline due to the unfavorable currency effect of the dollar, and finally after the termination of the company’s licensing agreements with Donna Karan New York (DKNY), Michael Kors, Tommy Hilfiger and the Ermenegildo Zegna product lines since June 30 of this year
Estée Lauder down 6 to 8% for the year
For the whole year, the group is now seeing its net sales fall by 6 to 8% and those, on a like-for-like basis, are up by only 2%. Earnings per share are now only expected to be in the range of 5.01 to 5.21 dollars, compared to a previous estimate of 7.11 to 7.33 dollars. The recovery that was expected in traffic with Hainan, China’s tourist island province, is expected to be weaker than hoped, Estee Lauder said.
Read also > Kering, l’Oréal and EssilorLuxottica: strong performances in the third quarter
Featured photo : © Presse
What's Your Reaction?

[EN] CLAIRE DOMERGUE, A SPECIALIST IN COMMUNICATION IN THE LUXURY SECTOR, HAS SURROUNDED HERSELF WITH EXPERTS TO CREATE THE FIRST MEDIA DEDICATED TO THE ECONOMIC NEWS OF LUXURY AND FASHION. THE LATTER DRAWS THE ATTENTION OF ITS READERS TO ALL THE MAJOR PLAYERS IN THESE SECTORS WHO SHARE THEIR EXPERIENCES, VISIONS AND KNOW-HOW. MORE THAN A SPECIALIZED WEBZINE, LUXUS PLUS IS A MULTI-SECTOR INFORMATION SYSTEM, WHICH HAS BECOME THE REFERENCE MONITORING TOOL FOR LUXURY AND FASHION PROFESSIONALS. OUR NEWSLETTERS CONTRIBUTE TO MAKE OUR READERS AWARE OF THE CHANGES AFFECTING THE LUXURY INDUSTRIES. THANKS TO AN INCREASED WATCH AND AN EXCELLENT KNOWLEDGE OF THE SECTOR, WE ARE INTERESTED IN THE MAIN ECONOMIC AND TECHNOLOGICAL STAKES OF FASHION, FINE WATCHMAKING, JEWELRY, GASTRONOMY, COSMETICS, PERFUMES, HOTELS, PRESTIGIOUS REAL ESTATE...********[FR] Claire Domergue, spécialiste de la communication dans le secteur du luxe, s’est entourée d’experts pour créer le premier média consacré à l’actualité économique du Luxe et de la mode. Ce dernier attire tout particulièrement l’attention de ses lecteurs sur l’ensemble des acteurs majeurs de ces secteurs qui y partagent leurs expériences, visions et savoir-faire. Plus qu’un webzine spécialisé, Luxus Plus est un système d’information multi-sectoriel, devenu l’outil de veille de référence pour les professionnels du luxe et de la mode. Nos newsletters de veille contribuent en effet à sensibiliser nos lecteurs aux mutations qui touchent les industries du luxe. Grâce à une veille accrue et à une excellente connaissance du secteur, nous nous intéressons aux principaux enjeux économiques et technologiques de la mode, la haute horlogerie, la joaillerie, la gastronomie, des cosmétiques, parfums, de l’hôtellerie, l’immobilier de prestige…