Thursday, the American cosmetics group announced that it wanted to cut its workforce because of the drop in sales, linked to the coronavirus.
The cosmetics group’s restructuring plan provides for the closure of 10% to 15% of its stores.
AFP
The American cosmetics group Estée Lauder announced Thursday the elimination of 1,500 to 2,000 jobs as well as other saving measures after a quarter marked by a sharp drop in the frequentation of its stores during the coronavirus pandemic.
The company presented in a statement a plan to be spread over two years and intended to “deal with the dramatic changes in the distribution landscape and consumer behavior after Covid-19”.
10 to 15% closures
This plan provides for the closure of 10% to 15% of its stores, mainly in Europe, the Middle East, Africa and North America, as well as an increase in investments in digital to reflect the ramping up of purchases. online, or in stores also offering online services.
The group (Estée Lauder, Clinique, Aveda, La Mer, Mac, Bobbie Brown brands) therefore plans to cut sales and sales support positions. The company will record a charge of $ 400 million to $ 500 million for all these restructuring operations.
In the fourth quarter of its fiscal year, which ended on June 30, Estée Lauder saw its sales fall by 32% to 2.43 billion dollars (2.21 billion francs) and the group suffered a loss of $ 462 million.
Reported on a per share basis and excluding one-time item, the loss was 53 cents, where analysts expected a loss of just 19 cents.
Expected sales decline
Estée Lauder does not want to give forecasts for the current fiscal year, but expects a drop in sales of 14% to 15% between July and September. The stock fell 6.4% in electronic trading before the official opening of the session on Wall Street.
Over its full fiscal year, Estée Lauder’s revenue fell 4% to $ 14.29 billion. The group posted net profit of $ 684 million, down 62% year-on-year. Adjusted per share, this comes down to $ 4.12, where analysts had expected $ 4.49.
“Fiscal 2020 has been a year without parallel as we achieved record sales and exceptionally strong adjusted earnings per share growth in the first half of the year, and weathered an unprecedented pandemic with agility in our second half of the year,” commented Estée Lauder CEO Fabrizio Freda, quoted in the press release.
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