Yahoo Finance Live anchors discuss quarterly earnings for Estée Lauder.

Video Transcript

- And guys, switching gears, here are shares of Estee Lauder. They are lower after the company reported earnings. But despite topping estimates, the company slashed its full year 2023 net sales forecast, as it now anticipates a decrease of 6% to 8% shares lower by about 7% right now here in-- for the company. And what they did report within this most recent quarter-- I mean net sales of $3.93 billion, a decline of 11% from the same period last year.

- A lot of red flags in this quarter. We'll start on Asia. They're calling out weakness in Asia. Really, I think mirrored what I heard from P&G, they own that SK2 line in China. It has been a big business for them, but that started to weak-- weaken in their most recent quarter. So Estee Lauder calling that out as well. Also calling out tightening of inventory by some retailers in the United States-- very interesting as well, curious on what that means for an Ulta when they report in a few weeks, but also curious what it may mean for department stores. Of course, you walk into department stores. You talk about it. We look-- we're always looking for Tom Ford cologne. Always, you walk into these stores.

- You go to Zara instead.

- I know. You're here with a lot of cosmetics sections. So I'm wondering how the back half of these quarters played out for department stores and a lot of other players off of these Estee Lauder numbers.

- I mean that updated guidance is just dramatic, right? That now-- they're now expecting a pretty steep decline in sales versus gain. They also cut their earnings per share forecast, by the way. And I just want to reiterate those numbers. Because again, it was pretty shocking when I saw this headline. The new forecast for the full year, $5.1 to $5.21. The earlier forecasts have been $7.11 to $7.33. We're talking about a $2 downgrade in the earnings per share forecast, which is pretty remarkable here. So that's one thing I wanted to flag.

Secondly, it does feel like what we're hearing from the cosmetic companies is a little bit lumpy. In other words, some do seem to be holding up OK. So as we get more information from them, which are, which aren't, is it the department store piece that is the issue here? And the Ultas of the world are doing better? I'm curious to see how that plays out.

- I'm interested by the Asia-- not the Asia cloth, the travel retail grow up because--

- Yep.

- --we've been getting great numbers. Airbnb- sure, stocks getting digged on the results. But that was a strong quarter. All the hotels, strong quarters. Airlines, strong quarters. So trying to figure out, is this a leading indicator of what might be to come this holiday season? Either way, it's not a good sign.