Nov 1 (Reuters) – Estee Lauder (EL.N) and Canada Goose Holdings (GOOS.TO), on Wednesday cut their annual forecasts as the U.S. luxury goods companies struggle with weak sales in high-growth market China, sending their shares tumbling more than 10%.
Major global companies ranging from L’Oreal (OREP.PA) to LVMH (LVMH.PA) have indicated that inflation and economic turmoil are curbing a post-pandemic spending spree, especially in their crucial China market.
Canada Goose’s sales in China slowed in the second quarter from the preceding quarter, while Estee has struggled with a weaker rebound in demand from fliers in Asia such as in Korea and China’s Hainan province.
Estee now expects full-year 2024 adjusted profit per share between $2.17 and $2.42, compared with its prior forecast of $3.50 to $3.75.
The company also estimated annual sales to decrease 2% to an increase of 1%, compared with the previous forecast of an increase between 5% and 7%.
Canada Goose expects full-year revenue to be between C$1.20 billion ($864.49 million) and C$1.40 billion, compared with its previous forecast of C$1.40 billion to C$1.50 billion.
The company sees annual adjusted profit of between C$0.60 and C$1.40 per share, compared to the C$1.20 to C$1.48 range it had previously forecast.
Canada Goose also saw revenues in the United States region decline nearly 11% as demand for high-end goods by affluent shoppers sag.
However, Estee, seen as affordable luxury, posted an 8% increase in sales in the U.S. from newer launches like The Ordinary, MAC’s skincare brand Hyper Real and Tom Ford’s Café Rose fragrance.
Shares of Estee fell about 13% in premarket trading while U.S.-listed shares of Canada Goose were down 11%.
($1 = 1.3881 Canadian dollars)
Reporting by Ananya Mariam Rajesh and Aatrayee Chatterjee in Bengaluru; Editing by Shounak Dasgupta, Maju Samuel and Sriraj Kalluvila
Our Standards: The Thomson Reuters Trust Principles.