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The American cosmetics group Estée Lauder is preparing to cut up to 2,000 jobs.
Estée Lauder has been hit hard by the Coronavirus pandemic.
This is why the luxury cosmetics brand has decided to cut 1,500 to 2,000 jobs.
The brand presented a two-year plan to “address the dramatic changes in the retail landscape and consumer behaviour after Covid-19“.
Indeed, its net profit of $684 million was down 62% year-on-year.
Adjusted per share, this comes to $4.12 where analysts had expected $4.49.
In addition, the company also plans to close 10 to 15% of its stores, mainly in Europe, the Middle East, Africa and North America.
“Fiscal 2020 was a record year, as we achieved record sales and exceptionally strong adjusted earnings per share growth in the first half of the year and navigated through an unprecedented pandemic in our second half with agility,” said Estée Lauder CEO Fabrizio Freda in the release.
This restructuring will save the company $400 to $500 million.
At the same time, the group will focus on digital sales by increasing its investments to rebound.
It should be noted that digital has enabled the sector leader, L’Oréal, to contain the erosion of its margins, with the group’s operating margin at 18% at the end of the first half, down slightly from the 18.6% recorded at the end of 2019.
In the fourth quarter of its fiscal year ended June 30, Estée Lauder’s sales declined by 32% to $2.43 billion.
The second leader in cosmetics does not wish to give any forecasts for the current fiscal year, but forecasts a drop in sales of 14 to 15% between July and September.
At the opening of Wall Street, the Estée Lauder stock was falling by more than 7%.
Finally, Estée Lauder’s sales declined by 4% to $14.29 billion for its entire fiscal year.
Read also > Digital transformation : Estée Lauder announces the nomination of Jane Lauder
Featured photo : © Estee Lauder[/vc_column_text][/vc_column][/vc_row]
