- Co beats Q3 estimates as demand improves amid turnaround push
- Over 70% of the additional job cuts will come from department store roles, company says
- Shares jump about 11% premarket
May 1 (Reuters) - Estee Lauder on Friday raised its annual profit forecast and laid out plans to cut up to 3,000 more jobs globally as it accelerates a broader restructuring, sending its shares up about 11% in premarket trading.
The Clinique and M.A.C owner, which is in talks to merge with Jean Paul Gaultier-owner Puig, said it now expects a total reduction of 9,000 to 10,000 positions, up from a prior estimate of as many as 7,000, and aims to save as much as $1.2 billion in costs.
At the upper end of these cuts, the new target is about 17.5% of its total employee base of 57,000 worldwide as of June 30, 2025, according to Estee's latest annual filing.
"The increase in planned job cuts could be an indication that in light of merger plans, Estee Lauder will be able to shed more positions on its side while retaining Puig employees," eMarketer analyst Sky Canaves said.
More than 70% of the additional cuts will come from reducing department store staff roles, the company said, as it pursues a turnaround that involves shifting focus to faster-growing digital and specialty retail channels such as Ulta, Sephora, Amazon and TikTok Shop.
RESTRUCTURING TAKES HOLD
Estee's focus on premium launches and streamlining the supply chain under CEO Stephane de La Faverie's "Beauty Reimagined" strategy helped improve quarterly sales in luxury markets, including China and Europe.
The company targets full-year adjusted profit of $2.35 to $2.45 per share, compared with its prior forecast of $2.05 to $2.25.
It also expects organic net sales to grow at the high end of its prior range of 1% to 3%.
Estee, however, said that its current forecast was based on the assumption that there was no deterioration in the geopolitical landscape or related impacts, including tariffs and consumer sentiment, as well as business disruptions in the Middle East beyond May 2026.
The company posted quarterly sales of $3.71 billion, beating estimates of $3.69 billion, according to data compiled by LSEG. Its adjusted profit of 88 cents per share also came in above estimates of 65 cents per share.
Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Anil D'Silva
Source: Reuters