Estée Lauder on Tuesday cut its sales forecast for 2021, taking the brunt of supply chain issues and suffering a resurgence of Covid-19 cases in its major markets.
Cosmetics giant Estée Lauder’s subdued forecast overshadowed a strong first quarter, boosted by strength in its skincare brands such as La Mer and Clinique among others.
The brand said its makeup category was the only segment that had not yet reached 2019 levels and added that traffic in its stores had not yet reached their pre-pandemic levels.
The company revised its numbers downward with a hope that its net sales will grow 12-15% in fiscal 2022, down from its original forecast of 13-16%.
There are also supply issues due to delays in deliveries related to congestion at ports, lack of personnel and containers, and cargo delays. “Increased transportation and logistics costs are expected to negatively impact costs and operating expenses for the remainder of fiscal 2022,” the brand explained.
Nevertheless, CFO Tracey Travis said Estée Lauder was in “very good shape” for the holiday season, adding that the company had taken steps, including upstream production and using air freight to avoid delays rankhaya.com.
Still, its revenue rose 23% to $4.4 billion and its profit jumped 32% in the period to $692 million. Both were above analysts’ expectations. This is due to the reopening of stores thanks to the decline of Covid-19, especially those in airports.
To offset its losses, Estée Lauder plans to increase its prices, change the range of products offered as well as save money on other expenses.
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Featured photo : © Estée Lauder
