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Estee Lauder Companies Inc. (EL+0.16%) has submitted its 10-Q filing for the quarterly period ended December 31, 2024.
The filing reports net sales of $4,004 million for the quarter, a decrease from $4,279 million in the same quarter the previous year. The decline was primarily driven by lower sales in the skin care and makeup categories, with skin care sales decreasing by 12% and makeup sales decreasing by 1%.
Operating income for the quarter was reported as a loss of $580 million, compared to an income of $574 million in the previous year. This decline was largely due to goodwill and other intangible asset impairments totaling $861 million.
Net loss attributable to Estee Lauder Companies Inc. was $590 million for the quarter, compared to net earnings of $313 million in the previous year. This translated to a diluted loss per common share of $1.64, compared to earnings of $0.87 per share in the prior year.
In the Americas, net sales decreased by 2%, primarily due to lower sales in North America and Latin America. In Europe, the Middle East & Africa, sales decreased by 6%, mainly due to lower sales in the travel retail business. Asia/Pacific sales decreased by 11%, impacted by lower sales in mainland China, Korea, and Hong Kong SAR.
The company reported a gross margin of 76.1% for the quarter, an increase from 73.0% in the previous year, driven by lower obsolescence charges and favorable manufacturing costs.
Operating expenses increased significantly to 90.6% of net sales, up from 59.6% in the previous year, primarily due to the impairment charges and higher general and administrative expenses.
Estee Lauder Companies Inc. continues to focus on its Profit Recovery and Growth Plan, which includes restructuring initiatives aimed at improving gross margin and reducing overhead expenses. The plan is expected to result in restructuring charges of $1,200 million to $1,600 million before taxes.
The company also reported a charge of $159 million related to talcum litigation settlement agreements, accounting for potential future claims.
Cash and cash equivalents at the end of the period were $2,586 million, down from $3,395 million at the beginning of the period. Net cash flows provided by operating activities were $387 million, while cash used for investing and financing activities was $294 million and $878 million, respectively.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Estee Lauder Companies Inc. quarterly 10-Q report dated February 4, 2025. To report an error, please email earnings@qz.com.