Estee Lauder on Tuesday expanded its restructuring plan that would include up to 7,000 job cuts and posted smaller-than-expected drop in second-quarter sales. Shares of the company, which fell about 49% last year, were marginally down in premarket trading.
Reuters
The company said that the expanded plan is to help Estee Lauder return to sales growth and restore a solid double-digit adjusted operating margin over the next few years along with the aim to “manage external volatility, such as potential tariff increases globally.”
As part of its turnaround efforts to drive profit recovery, the company has been implementing restructuring programs, which include a series of changes in the executive team after Stéphane de La Faverie took on the role of Chief Executive Officer in January.
Estee Lauder expects to take restructuring and other charges of between $1.2 billion and $1.6 billion, before taxes, consisting of employee-related costs, contract terminations, asset write-offs, and other costs associated with implementing these initiatives.
The company’s sales fell 6% to $4 billion in the quarter, compared with analysts’ estimates of 7.3% drop to $3.97 billion, as per data compiled by LSEG.
