Estée Lauder shares plunge 20% as cosmetics giant yanks forecast on weak sales

Company Overview - Estée Lauder shares fell over 20% after the company withdrew its full-year earnings forecast, citing weak demand for luxury fragrance and cosmetic products [1] - The company's stock reached its lowest level in a decade at $68.03, down 22$1.06 [2] - The company anticipates net sales to decline between 6% and 8%, contrasting with Wall Street's estimate of a 0.2% growth to $4.3 billion [3] Leadership Changes - Estée Lauder appointed Stephane de la Faverie as the new CEO, effective January 1, as part of a leadership overhaul [3][9] - The company is also bringing in a new chief financial officer following the retirement announcement of longtime CFO Tracey Travis [9] Market Conditions - The beauty and luxury goods sectors are facing challenges due to reduced spending by Chinese consumers, impacted by a hiring slump, lower wages, and a weak housing market [4][6] - Estée Lauder's first-quarter sales in the Asia Pacific region fell 11%, compared to a 3% decline in the previous quarter [7] Industry Context - Other luxury brands, such as LVMH, have also reported disappointing sales, with a 5% decline in their fashion and leather goods unit, particularly in the Chinese market [8] - The company remains "cautiously optimistic" about medium- to long-term growth opportunities due to potential stimulus in China, although it does not expect immediate benefits for its second-quarter performance [6]