LTN’s “Lipstick” Indicator Says US, World Consumer is Challenged

LTN’s “Lipstick” Indicator Says US, World Consumer is Challenged

LTN’s “Lipstick” Indicator Says US, World Consumer is Challenged

Cosmetics maker Estee Lauder Cos. (NYSE:EL) reported a smaller-than-expected rise in Quarterly sales, hurt by a slowdown in sales in the Americas as fewer consumers visited department stores and tourist spending declined.

Shares of the company were down about 4% at 91.73 Friday, up to Thursday’s close, the stock had risen 13.5% in the past year.

Sales in the Americas, its biggest market, rose 1.4% to $1.1-B on a reported basis, its slowest growth in 4 Quarters.

Lower retail traffic mainly affected the company’s “heritage” brands Estee Lauder and Clinique, and in M.A.C freestanding stores.

Demand for its skincare products continued to weaken, as the company cited overall global slowdown in the sector. Sales from its namesake brand and Clinique were also hurt by lower sales in some Asia-Pacific countries, mainly Hong Kong.

“Social and political issues, currency volatility and economic challenges are affecting consumer behavior in certain countries, such as Hong Kong, France and some emerging markets,” the company said.

L’Oreal SA earlier reported Q-2  sales growth below forecast as the company said Western Europe was being held back due to a “very difficult market in France.”

Net income attributable to the company fell to $93.5-M, or 0.25/share, in the Quarter, down from $153-M, or 0.40/share, a year earlier.


Net sales rose to $2.65-B from $2.52-B.

New York City-based Estee Lauder said its expects F-Y 2017 adjusted profit to be between 3.38-3.44/share, missing analysts’ estimates of 3.53.

The company also said it expects to incur restructuring charges of about $80 – 100-M in F-Y 2017, related to its Leading Beauty Forward strategy.

As part of its Leading Beauty Forward strategy, the company had earlier approved restructuring initiatives to exit businesses in certain markets and channels of distribution while also reducing its workforce globally.

Symbol Last Trade Date Change Open High Low Volume
NYSE:EL 91.73 19 August 2016 -3.37 91.89 93.25 91.06 5,640,700
HeffX-LTN Analysis for EL: Overall Short Intermediate Long
Neutral (-0.15) Bearish (-0.47) Bearish (-0.25) Bullish (0.28)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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