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A couple walks by Estee Lauder store in Kuala Lumpur.
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Estée Lauder shares sink on weak outlook and a billion-dollar restructuring charge

Shares tumbled more than 11% on Tuesday after the beauty giant’s current-quarter forecast underwhelmed investors. It also plans to cut up to 7,000 jobs.

Nia Warfield

Estée Lauder shares tumbled more than 10% on Tuesday after the beauty giant gave a weak outlook for the current quarter, took a $1 billion restructuring charge, and said it plans to cut up to 7,000 jobs. 

Despite the shake-up, Estée’s Q2 results managed to top expectations. Sales for the quarter hit $4 billion, edging past Wall Street’s $3.98 billion forecast. Meanwhile, earnings per share came in at $0.62 — nearly double estimates. Still, the Bobbi Brown and Clinique parent continues to struggle with weaker consumer spending in North America as well as key markets like South Korea and China. Sales have declined year over year for the past two straight quarters.

For the current quarter, it said it expects to earn $0.24 to $0.34 a share, far below analysts’ expectations of $0.63, according to FactSet.

The company also unveiled Beauty Reimagined, a new restructuring program aimed at driving more sustainable sales growth and improving margins. The plan includes “unburdening smaller brands” and ramping up ad spending, among other efforts.

Estée Lauder shares are down more than 50% over the past year.

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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