- Estee Lauder shares soared after the cosmetics giant posted better-than-expected results and said it would cut jobs as part of a restructuring plan.
- CEO Fabrizio Freda said Estee Lauder is at an inflection point and is making progress.
- Estee Lauder projects it will return to double-digit organic sales growth this year.
Shares of Estee Lauder (EL) soared more than 14% in early trading Monday after the cosmetics giant posted better-than-expected earnings and said it would cut jobs as part of a restructuring plan.
The company reported second-quarter fiscal 2024 earnings per share (EPS) of $0.88, above analyst estimates. Revenue fell 7.4% from a year earlier to $4.28 billion, also beating forecasts.
CEO Fabrizio Freda said Estee Lauder is at “an inflection point” and noted that the company made progress in the first half of the year “on several strategic priorities.” He pointed to inventory reduction in Asian travel retail, improving working capital, price increases and “spending management with discipline.”
The company also announced plans to extend its Profit Recovery Plan through fiscal years 2025 and 2026, beginning with measures in the current quarter that include job cuts. Estee Lauder said it will eliminate between 3% and 5% of its workforce, affecting approximately 3,150 employees.
Estee Lauder said it anticipates a return to double-digit percentage organic sales growth in the second half of the fiscal year.
Shares of Estee Lauder rose 14.3% to $153.24 around noon ET on Monday. However, even with Monday’s gains, they were still down 41% from last year.