THE WHAT? The Estée Lauder Companies has cut its full year forecast due to COVID-19 related lockdowns in China, currency fluctuations and record high inflation. 

THE DETAILS The beauty giant saw Q1 net sales decline 11 percent to US$3.93 billion YOY, with net earnings coming in at US$489 million compared to US$692 million the year prior. 

According to the company, “Headwinds will continue to pressure the second quarter, with strong growth expected to gradually resume in the second half of fiscal 2023.”

THE WHY? Fabrizio Freda, President and Chief Executive Officer said, “For the first quarter, we delivered organic sales in line with our outlook and adjusted EPS ahead of it even as the transitory external pressures of COVID-19 restrictions in China, high inflation globally, and a strong U.S.dollar intensified. Our multiple engines of growth strategy empowered us to seize prevailing growth opportunities amid the complexity.

“Fragrance and Hair Care each rose double digits organically, and Makeup’s renaissance continued to realize its promise in markets reopening. Skin Care was the most challenged by COVID-19 restrictions in China, which significantly impacted the category in travel retail. All told, 13 brands grew organically, as M·A·C excelled in Makeup, La Mer in luxury Skin Care, Jo Malone London in Fragrance, and Aveda in Hair Care. Encouragingly, we realized strong double-digit gains in many large developed and emerging markets around the world.”