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Estée Lauder on Tuesday expanded its restructuring plan that would include up to 7,000 job cuts and posted smaller-than-expected drop in second-quarter sales.
Shares of the company, which fell about 49 percent last year, were marginally down in premarket trading.
The company said that the expanded plan is to help Estée Lauder return to sales growth and restore a solid double-digit adjusted operating margin over the next few years along with the aim to “manage external volatility, such as potential tariff increases globally.”
As part of its turnaround efforts to drive profit recovery, the company has been implementing restructuring programs, which include a series of changes in the executive team after Stéphane de La Faverie took on the role of chief executive officer in January.
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Estée Lauder expects to take restructuring and other charges of between $1.2 billion and $1.6 billion, before taxes, consisting of employee-related costs, contract terminations, asset write-offs, and other costs associated with implementing these initiatives.
The company’s sales fell 6 percent to $4 billion in the quarter, compared with analysts' estimates of 7.3 percent drop to $3.97 billion, as per data compiled by LSEG.
By Anuja Bharat Mistry; Editor: Tasim Zahid
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Estée Lauder Reviews Brands Amid Management Change
The beauty giant is reviewing its portfolio of beauty brands with Evercore Inc. as it looks to streamline operations and boost its share price under new CEO Stéphane de La Faverie.
