The Estée Lauder Cos. Forecasts 9 Percent Drop in Sales in 2025, But Expects Return to Growth Next Year

After scrapping its previous full year forecast, The Estée Lauder Cos. now expects sales to drop by as much as 9 percent in 2025, but sees a return to growth next year.

The bigger than expected annual drop comes on the back of a forecasted stronger double-digit net sales decline in the company’s global travel retail business in the fiscal 2025 fourth quarter compared to the third quarter.

Lauder also expects a high-single digit organic net sales decline in Asia/Pacific for fiscal 2025, primarily driven by ongoing subdued consumer sentiment from Chinese consumers and the impact of the company’s strategic exit of Dr.Jart+ from the travel retail channel in Korea.

Stéphane de La Faverie, president and chief executive officer, said: “With the strategic reset of our travel retail business well underway to better reflect recent industry trends and market conditions, and provided there is meaningful resolution of the recently enacted tariffs to mitigate potential related negative impacts, we are confident in our ability to return to sales growth in fiscal 2026.”

This comes as the third quarter numbers came in better than expected, although all categories and geographies saw declines.

Net sales for the third quarter decreased 10 percent to $3.6 billion, while organic net sales fell 9 percent. Analysts had forecast net sales of $3.52 billion.

Adjusted diluted net earnings per common share decreased to 65 cents, compared with 97 cents, but above Wall Street forecasts for 29 cents.

Skin care net sales slid 11 percent, primarily due to the decrease in the company’s Asia travel retail business, which drove declines from Estée Lauder and La Mer.

Makeup net sales decreased 7 percent, driven by declines from MAC, reflecting an unfavorable impact from the timing and lower level of shipments for new product launches compared to the prior-year period.

Fragrance net sales fell 1 percent, while hair care dropped 10 percent.

On a geographical basis, net sales in the Americas dropped 5 percent, by 16 percent in Europe Middle East and Africa and 1 percent in Asia Pacific.