By Anuja Bharat Mistry and Arriana McLymore
May 1 (Reuters) – Estée Lauder on Friday raised its annual profit forecast and said it would cut up to 3,000 more jobs globally as it accelerates a broader restructuring, sending its shares up about 7% in early trading.
The Clinique and M.A.C owner, which is in talks to merge with Jean Paul Gaultier-owner Puig, said it now expects total job cuts of 9,000 to 10,000, up from a prior estimate of as many as 7,000, and aims to save as much as $1.2 billion in annual costs.
At the upper end, the new target would amount to about 17.5% of its global workforce of 57,000 as of June 30, 2025, according to Estée’s latest annual filing.
“The increase in planned job cuts could be an indication that in light of merger plans, Estée Lauder will be able to shed more positions on its side while retaining Puig employees,” eMarketer analyst Sky Canaves said.
More than 70% of the additional cuts will come from reductions in department store roles, the company said, as it shifts focus towards faster-growing digital and specialty retail channels such as Ulta, Sephora, Amazon and TikTok Shop.
RESTRUCTURING TAKES HOLD
Estée’s push into premium launches and efforts to streamline its supply chain under CEO Stephane de La Faverie’s “Beauty Reimagined” strategy helped lift quarterly sales in luxury markets, including China and Europe.
To bolster its fragrances business amid sluggish U.S. consumer spending, Estée has been exploring a merger with Puig.
Luxury brands have also been hit in Dubai and Abu Dhabi by the impact of the Iran war, which has disrupted the sector’s fastest-growing market.
French luxury group LVMH said in April that the Iran war cut at least 1% off group sales in the last quarter. Puig said this week that the conflict was hurting demand, but kept its full-year outlook unchanged.
Estée said the conflict cut quarterly sales by 1 percentage point and expects a 2-percentage-point impact in the fourth quarter.
The company now expects full-year adjusted profit of $2.35 to $2.45 per share, up from its previous forecast of $2.05 to $2.25, and said organic net sales should grow at the high end of its prior 1% to 3% range.
It added that the forecast assumes no further deterioration in the geopolitical environment, including tariffs, consumer sentiment and business disruption in the Middle East beyond May 2026.
Quarterly sales rose to $3.71 billion, beating analysts’ estimate of $3.69 billion, according to LSEG data. Adjusted profit of 88 cents per share also topped expectations of 65 cents per share.
(Reporting by Anuja Bharat Mistry in Bengaluru and Arriana McLymore in New York City. Editing by Anil D’Silva and Mark Potter)
Comments