Fabrizio Freda, President and CEO of The Estée Lauder Companies.
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MAC lipstick machine Estee Lauder Shares fell 10% in pre-market trading after it forecast lower-than-expected profits and sales in 2025 due to slowing demand in the global beauty market and said longtime Chief Executive Fabrizio Freda would retire.
The company said the main reason for the decline in sales in China was the continued weakness in the overall high-end beauty market, with consumption remaining tight during holidays and key shopping moments.
European counterparts L’OrealThe latest quarter’s lower-than-expected sales also signaled slower-than-expected growth in the global beauty market and highlighted the lack of rebound in the Chinese market.
News of the longtime CEO’s retirement comes as The Estée Lauder Cos. Chief Financial Officer Tracey Travis steps down after 12 years and amid a turnaround plan for the company.
In July, Estée Lauder said insider Akhil Shrivastava would succeed Travis as the company’s financial chief.
Freda, 66, joined Estée Lauder in 2008 as president and chief operating officer and was later named company chief executive.
On Monday, Estée Lauder said its board of directors was considering internal and external candidates as part of its chief executive succession plan.
Estee said Freda will continue to lead and oversee the company’s strategic, financial and investment priorities until a successor is named.
The company expects sales to fall 1% to grow 2% in fiscal 2025, while analysts expect growth of 6.43%, according to LSEG data.
Estee Lauder expected adjusted profit per share to be between $2.75 and $2.95, compared with analysts’ expectations of $3.96.
The company’s adjusted quarterly net sales rose to $3.87 billion from $3.63 billion a year earlier. Analysts had previously estimated $3.81 billion.
