With a market cap of $31.5 billion, The Estée Lauder Companies Inc. (EL) operates in the beauty and personal care industry. The New York-based company manufactures, markets, and sells a wide range of products globally under brands like Estée Lauder, Clinique, M·A·C, and La Mer through department stores, specialty retailers, and e-commerce platforms worldwide. It is expected to unveil its fiscal Q1 2025 earnings results before the market opens on Thursday, Oct. 31.
Before the event, analysts anticipated the cosmetics giant to report a profit of $0.09 per share, down 18.2% from $0.11 per share in the same quarter last year. However, the company has consistently surpassed Wall Street's earnings projections over the previous four quarters. EL exceeded the consensus estimate by an impressive 156% margin in the most recent quarter.
For fiscal 2025, analysts anticipate EL to report EPS of $2.97, up 14.7% from $2.59 in fiscal 2024. In addition, looking forward to fiscal 2026, its EPS is expected to grow 35% year-over-year to $4.01.
Over the past 52 weeks, EL's shares have declined 36.1%, significantly underperforming the broader S&P 500 Index's ($SPX) 36.8% gain and the Consumer Staples Select Sector SPDR Fund's (XLP) 20.8% increase over the same period.
Despite reporting better-than-expected Q4 adjusted EPS of $0.64, Estée Lauder's shares fell 2.2% on Aug. 19 due to concerns over ongoing weakness in key markets, particularly mainland China and Asia travel retail. Additionally, management's cautious guidance for fiscal 2025, projected flat to slightly declining sales and a significant expected decline in adjusted EPS for Q1. The broader sluggishness in the prestige beauty segment, combined with potential risks such as retailer destocking and shifts in consumer behavior, further dampened investor sentiment.
However, the stock jumped 6.1% on Sep. 24 after China's central bank cut interest rates by 50 basis points to stimulate the economy, which is vital for the company's sales. This move raised hopes for a rebound in consumer spending in China, a key market that generates nearly a third of Estée Lauder's revenue.
Analysts' consensus rating on Estée Lauder stock is cautiously optimistic, with a "Moderate Buy" overall rating. Out of 28 analysts covering the stock, opinions include eight "Strong Buys," one "Moderate Buy," and 19 "Holds." This configuration has remained fairly steady over the past three months. As of writing, EL is trading below the average analyst price target of $106.60.
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