Estée Lauder cuts dividend and withdraws forecast: Sales crisis in China worsens

The cosmetics industry is currently showing its less glamorous side, as Estée Lauder, the parent company of brands such as Clinique and MAC, is grappling with a significant sales crisis in China. In a recent statement, the company announced that the anticipated recovery of demand in the Chinese market is progressing more slowly than hoped. During the three-month period up to September, the company recorded double-digit sales declines there. In light of these uncertainties, Estée Lauder has decided to withdraw its annual forecast and reduce the dividend to a more appropriate level. The group states that it is currently difficult to predict when the Chinese market will recover. In recent years, China has been an important source of revenue for Estée Lauder as well as for the larger competitor L'Oréal, both of which have benefited greatly from the purchasing power there. However, the current economic downturn is hitting the industry hard. The news has already caused turmoil in the stock market: Estée Lauder's New York-listed shares suffered a price drop, recording a nearly 20 percent decline in pre-market trading.