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We recently compiled a list of the 10 Firms Fall Amid Disappointing Earnings Performance. In this article, we are going to take a look at where Estee Lauder Companies Inc. (NYSE:EL) stands against the other stocks.
Wall Street’s main indices all finished in the green territory on Tuesday, buoyed by news that the US is set to temporarily delay taxes levied on select goods from Canada and Mexico to make way for a potential negotiation.
The Dow Jones inched up by 0.30 percent, while the S&P 500 and Nasdaq both jumped 0.72 percent and 1.35 percent, respectively.
Meanwhile, 10 companies bucked an overall positive market sentiment, leading declines mostly due to disappointing earnings performance in the past quarter. This article details the reasons behind their poor performance.
To come up with Tuesday’s biggest losers, we only considered the companies with $2 billion in market capitalization and $5 million in daily trading volume.
A close-up of a makeup artist carefully applying Makeup Products to an clients face.
Estee Lauder Companies Inc. (NYSE:EL)
Estee Lauder Companies Inc. (NYSE:EL) saw its shares plummet by 16.07 percent on Tuesday to end at $69.47 apiece as investor sentiment was dragged down by news that it would cut 7,000 jobs following a sales slump.
In the second quarter of fiscal year 2025, Estee Lauder's net sales declined by 6 percent to $4 billion from $4.3 billion year-on-year.
Gross profit dipped by 2 percent to $3.05 billion from $3.12 billion, while operating loss was at $580 million as compared with a $574 million operating income year-on-year.
Given the ongoing challenges in its Asia business, coupled with global geopolitical uncertainty, the company anticipates continued volatility and low visibility in the near term.
“While we are not satisfied with our third quarter outlook, it primarily reflects weak retail sales trends in our Asia travel retail business, which deteriorated in our second quarter driven by Korea. While our retail sales trends in Hainan were still negative in the second quarter, they improved sequentially, fueled by our retail activations,” said Estee Lauder President and CEO Stephane de La Faverie. “For the third quarter, we expect overall soft retail trends to persist in Asia travel retail, significantly pressuring our organic net sales despite the improvement we made with in-trade inventory levels in the first half of fiscal 2025, which we intend to maintain around current levels.”
Overall EL ranks 1st on our list of Tuesday's biggest losers. While we acknowledge the potential of EL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than EL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.