Estée Lauder blames coronavirus outbreak for profit forecast cuts

The maker of Clinique and Jo Malone London said it expects to be ‘adversely impacted’ over the next few months

In the wake of the coronavirus outbreak, Estée Lauder Companies (ELC), has lowered its net sales outlook for the second half of the year.

The maker of Clinique and La Mer confirmed in its Q2 Fiscal Report that it expects to be ‘adversely impacted’ over the next few months, as a decline in air travel and consumer traffic in key markets slows trade.

Reported net sales are forecasted to increase between 0% and 1%, versus the previous year, meanwhile, Q3 is expected to be hit hardest by declining sales.

ELC’s President and CEO Fabrizio Freda, said: “We are first and foremost concerned about the health and safety of our employees, consumers and everyone affected in China and around the world.

“Our hearts and support go out to the many people working hard to mitigate the health risks of the coronavirus.

“The global situation will also affect our financial results in the near term, so we are updating our fiscal year outlook.

“With our results to date and our agility in allocating resources, we will strive to deliver full-year growth at least in line with our long term goals, even in this challenging moment.”

Earlier this week, Shiseido published a statement expressing its “deepest condolences” to consumers affected by the novel coronavirus.

Despite the slow, Estée Lauder Companies reported net sales of US$1.3m in 2019, compared with its $1.02m net sales in 2018, in the Asia/Pacific market.

The owner of South Korean beauty brand Dr. Jart+ is also bracing itself for global risks related to social, economic and political issues, including geographical tensions and regulatory matters, such as Brexit.

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