===Estee Lauder (EL) reported earnings on Wed 1 Nov 23 (b/o)

 

Estee Lauder beats by $0.32, reports revs in-line; guides Q2 EPS below consensus; guides FY24 EPS below consensus

• Reports Q1 (Sep) earnings of $0.11 per share, excluding non-recurring items, $0.32 better than the FactSet Consensus of ($0.21); revenues fell 10.6% year/year to $3.52 bln vs the $3.53 bln FactSet Consensus.
• Co issues downside guidance for Q2, sees EPS of $0.48-0.58, excluding non-recurring items, vs. $1.21 FactSet Consensus. Reported net sales are forecasted to range between a decrease of 2% and an increase of 1% versus the prior year.
• The Company is lowering its outlook to reflect the slower pace of recovery in net sales and margins as a result of incremental external headwinds. In mainland China, the expected growth rate of overall prestige beauty has slowed. To reflect this trend, the Company is lowering its fiscal 2024 expectations for mainland China and Asia travel retail. Amid this headwind, the Company continues to expect to reset retailer inventory in Asia travel retail by the end of the third quarter of fiscal 2024. This, combined with the potential risks of further business disruptions in Israel and other parts of the Middle East as well as currency headwinds, are increasing the pressure on the Company's fiscal 2024 financial results. 
• Co issues downside guidance for FY24, sees EPS of $2.17-2.42, excluding non-recurring items, vs. $3.60 FactSet Consensus. Reported net sales are forecasted to range between a decrease of 2% and an increase of 1% versus the prior year.
  • The full year outlook reflects the following assumptions and expectations:
    • A return to net sales growth in the second half of fiscal 2024.
    • Full-year gross margin expansion primarily driven by strategic price increases, discount reductions and lower obsolescence charges, largely offset by manufacturing under-absorption. Contraction in the first half of fiscal 2024 is expected to be more than offset by expansion in the second half.
    • Progressive operating margin improvement throughout the second half of fiscal 2024 due to the cadence of the improvement of the Asia travel retail business and in mainland China.
    • Full year effective tax rate of approximately 28%.