EL Stock Plummets 39% in 6 Months: What's Next for Investors?

Zacks11-28 19:56

The Estee Lauder Companies Inc. EL has experienced notable volatility in its stock performance. Over the past six months, the stock has slumped 39.2%, underperforming the industry’s decline of 36.5%. ...

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Over the past six months, the stock has slumped 39.2%, underperforming the industry’s decline of 36.5%. ...</p>\n\n<a href=\"https://finance.yahoo.com/news/el-stock-plummets-39-6-115600218.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>EL Stock Plummets 39% in 6 Months: What's Next for Investors?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nEL Stock Plummets 39% in 6 Months: What's Next for Investors?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-28 19:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/el-stock-plummets-39-6-115600218.html><strong>Zacks</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The Estee Lauder Companies Inc. EL has experienced notable volatility in its stock performance. Over the past six months, the stock has slumped 39.2%, underperforming the industry’s decline of 36.5%. ...</p>\n\n<a href=\"https://finance.yahoo.com/news/el-stock-plummets-39-6-115600218.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"GAP","symbol_name":"Gap, Inc","start_time":0,"source_url":"https://finance.yahoo.com/news/el-stock-plummets-39-6-115600218.html","article_id":"2486130319","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/wdzFTgDZtw8A4Jf8s0Jbbw--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/fd7d9341593a93c951679f813f3417f3"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2486130319","pubTimestamp":1732794960,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"The Estee Lauder Companies Inc. EL has experienced notable volatility in its stock performance. Over the past six months, the stock has slumped 39.2%, underperforming the industry’s decline of 36.5%. The Zacks Consumer Staple sector and the S&P 500 registered increases of 4.3% and 13.9%, respectively, highlighting EL’s underperformance during this period. This downward trend reflects persistent challenges in China and Asia travel retail.Thanks to a dynamic operating environment, The Estee Lauder Companies recently withdrew its fiscal 2025 forecast and provided a disappointing outlook for second-quarter fiscal 2025. Management expects an organic net sales decline of 6-8% compared to the prior year’s level for the fiscal second quarter. Quarterly adjusted earnings per share  are likely to slump by 60-77%, ranging from 20 to 35 cents. 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EL has experienced notable volatility in its stock performance. Over the past six months, the stock has slumped 39.2%, underperforming the industry’s decline of 36.5%. The Zacks Consumer Staple sector and the S&P 500 registered increases of 4.3% and 13.9%, respectively, highlighting EL’s underperformance during this period. This downward trend reflects persistent challenges in China and Asia travel retail.\nChina Weakness Hinders EL’s Momentum\nThe Estee Lauder Companies began fiscal 2025 on a challenging note marked by weaknesses in Mainland China and global travel retail during the first quarter. These factors put pressure on its first-quarter fiscal 2025 results, with organic net sales dropping 5% due to deteriorating consumer sentiment in China, which contributed to a slowdown in the prestige beauty sector in mainland China and reduced conversion rates across Asia travel retail and Hong Kong SAR. Reduced replenishment orders in Asia travel retail, including inventory challenges amid a slowing retail market, added additional pressure on organic sales.In the fiscal first quarter, organic net sales in the Asia Pacific region dropped 11% due to continued softness in the prestige beauty sector, thanks to weakened consumer sentiment in Mainland China. In addition, net sales in Hong Kong SAR declined, impacted by reduced spending from traveling consumers and lower foot traffic at retail stores.The company's global travel retail net sales fell by double digits owing to reduced replenishment orders in Asia travel retail in the quarter. This decline reflects the continued slowdown in the retail market and deteriorating consumer sentiment in China, leading to lower conversion rates. These declines in two critical markets are adding to the company’s revenue and profitability difficulties given their historical importance to its growth.\nImage Source: Zacks Investment Research\nDividend Cut Reflects EL’s Financial Strain\nIn light of the complex prestige beauty landscape and the challenges in forecasting market stabilization and recovery in mainland China and Asia travel retail, The Estee Lauder Companies recently reduced its dividend to align with a more suitable payout ratio. The quarterly dividend was reduced from the previous quarterly dividend of 66 cents per share to 35 cents per share on its Class A and Class B Common Stock, marking a significant reduction.\nChallenging Road Ahead for EL\nThanks to a dynamic operating environment, The Estee Lauder Companies recently withdrew its fiscal 2025 forecast and provided a disappointing outlook for second-quarter fiscal 2025. Management expects an organic net sales decline of 6-8% compared to the prior year’s level for the fiscal second quarter. Quarterly adjusted earnings per share (EPS) are likely to slump by 60-77%, ranging from 20 to 35 cents. The outlook reflects significant headwinds in retail across China and Asia travel retail, as the company does not anticipate any immediate benefits from new economic stimulus measures in China.\nWhat Should EL Investors Do?\nThe Estee Lauder Companies is focused on rebuilding profitability through its Profit Recovery and Growth Plan. Despite such efforts, the company continues to face significant challenges, particularly in China and Asia travel retail, which have severely impacted its growth. With a reduced dividend and a disappointing outlook, investors should be cautious. With no immediate recovery expected in the short term, investors should approach with caution and closely monitor EL’s performance for signs of stabilization. At present, the company carries a Zacks Rank #5 (Strong Sell).\nBetter-Ranked Stocks\nAbercombie ANF, a leading casual apparel retailer, currently sports a Zacks Rank of 1 (Strong Buy). ANF delivered an earnings surprise of 14.8% in the last reported quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus estimate for Abercrombie’s current financial year sales and earnings indicates growth of 13.4% and 64.8%, respectively, from the prior-year figures.Deckers DECK, a footwear and accessories dealer, currently sports a Zacks Rank #1. DECK delivered an average earnings surprise of 41.1% in the trailing four quarters.The Zacks Consensus Estimate for Deckers’ current financial year sales and earnings indicates growth of 13.6% and 12.6%, respectively, from the prior-year figures.The Gap, Inc. GAP operates as an apparel retail company that offers apparel, accessories and personal care products for men, women and children, presently flaunts a Zacks Rank #1.The Zacks Consensus Estimate for The Gap’s current fiscal-year sales and earnings indicates growth of 0.7% and 39.9%, respectively, from the year-ago quarter’s reported numbers. GAP has a trailing four-quarter average earnings surprise of 101.2%.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nAbercrombie & Fitch Company (ANF) : Free Stock Analysis Report\nDeckers Outdoor Corporation (DECK) : Free Stock Analysis Report\nThe Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report\nThe Gap, Inc. (GAP) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-2","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2486130319"}