Estée Lauder Reports 10% Sales Decline in Q3 as Skin Care and Makeup Categories Fall

THE WHAT?  The Estée Lauder Companies recorded a 10% year-on-year decline in net sales for the third quarter of fiscal 2025, with lower performance across skin care, makeup, fragrance, and hair care.

THE DETAILS Total net sales fell to US$3.55 billion for the three months ending 31 March 2025. Organic net sales declined by 9%. The company reported a 42% drop in operating income to US$306 million and a 52% decrease in diluted net earnings per share to US$0.44.

In cosmetics and personal care:

• Skin care sales declined 11%, driven by reduced replenishment orders in Asia travel retail and weaker demand for Estée Lauder and La Mer.
  
• Makeup was down 7%, impacted by lower shipments from M·A·C and Estée Lauder, with retailer destocking also noted.
  
• Fragrance declined 1%; Le Labo grew but was offset by declines in Jo Malone London and Clinique.
  
• Hair care sales dropped 10%, mainly due to soft results from Aveda.

Prestige beauty share gains were reported in the US, China, and Japan, though these were not sufficient to offset broader category declines. Recent launches included products from M·A·C, La Mer, Estée Lauder, and The Ordinary.

THE WHY? The results reflect continued weakness in Asia travel retail and shifts in retailer ordering patterns, particularly in South Korea and China. Estée Lauder is also undergoing cost restructuring and reported lower shipment volumes, margin compression, and a decrease in operating cash flow. The company has signaled a deeper decline in travel retail expected for Q4.

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