Estee Lauder to cut up to 7,000 jobs, Q2 sales drop

(Sharecast News) - Cosmetics business Estee Lauder said on Tuesday that it would cut as many as 7,000 jobs as part of its restructuring plan as it reported a drop in Q2 sales. Estee Lauder said its restructuring plan was expected to help the group return to sales growth and restore double-digit adjusted operating margins. It also hopes restructuring efforts will help it manage "external volatility", such as potential global tariff increases.

The New York-based firm expects to take a hit of $1.2bn-1.6bn on the restructuring, before taxes, consisting of employee-related costs, contract terminations, asset write-offs, and other associated costs.

The announcement comes as it also revealed Q2 sales had fallen 6% to $4.0bn, compared with analysts' estimates for a steeper 7.3% drop to $3.97bn, swinging the group from a profit of $313.0m twelve months earlier to a loss of $590.0m for the quarter. For Q3, Estee Lauder expects net sales to fall 10-12%.

Sales were down 12% in its skincare business, while hair care sales were down 8%. Fragrance sales were up 1%, driven by Estee Lauder's luxury brands.

As of 1320 GMT, Estee Lauder shares were down 6.97% in pre-market trading at $77.00 each.









Reporting by Iain Gilbert at Sharecast.com