What's happened
Estée Lauder's shares dropped 22% to $68.03, marking a decade low, as the company forecasts disappointing second-quarter earnings. New CEO Stephane de la Faverie will take over in January amid a consumer spending slowdown, particularly in China, impacting sales projections significantly.
Why it matters
What the papers say
According to the New York Post, Estée Lauder's shares have plummeted 40% this year, reflecting broader struggles in the luxury goods market. The company has pulled its annual forecasts, indicating uncertainty in its financial outlook. Outgoing CEO Fabrizio Freda noted, 'We anticipate still-strong declines near-term for the industry in China and Asia.' Meanwhile, Business Insider reported on Jane Lauder's departure from her executive role, emphasizing the significant leadership changes occurring within the company. This shake-up comes as Estée Lauder grapples with a challenging market environment, particularly in China, where consumer confidence has waned. Analysts suggest that the company's future hinges on its ability to adapt to these market conditions and effectively implement its new leadership strategy.
How we got here
Estée Lauder has struggled with declining sales, particularly in China, where consumer spending has weakened. The company announced leadership changes, including the appointment of a new CEO, as it seeks to navigate these challenges and improve its market position.
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China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.