Fabrizio Freda, President and CEO of Estee Lauder.
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MAC lipstick maker Estee Lauder forecast 2025 profit and sales below estimates as the global beauty market struggles with slowing demand, and said long-time CEO Fabrizio Freda was retiring, sending its shares down 10% in premarket trading.
The company said sales in China decreased primarily due to ongoing softness in overall prestige beauty segment as spending during holiday and key shopping moments remained strained.
European peer L’Oreal, which missed sales expectations for the most recent quarter, also flagged that the global beauty market was growing slower than expected, and highlighted the lack of a rebound in the China market.
The news of long-time CEO retiring comes amid a turnaround plan and on the heels of Estee’s Chief Financial Officer Tracey Travis stepping down after a 12-year stint.
In July, Estee said insider Akhil Shrivastava will succeed Travis as the company’s finance chief.
Freda, 66, joined Estee in 2008 as president and chief operating officer and was later named the company’s CEO.
On Monday, Estee said the board was considering internal and external candidates as part of its CEO succession planning.
Until a successor is appointed, Freda will continue to lead and oversee the company’s strategic, financial and investment priorities, Estee said.
The company expects fiscal 2025 sales to be between a fall of 1% and a 2% rise, compared with an analyst estimate of a 6.43% rise, according to LSEG data.
Estee expects annual adjusted profit per share between $2.75 and $2.95, compared with analysts’ expectations of $3.96.
The company’s adjusted quarterly net sales rose to $3.87 billion from $3.63 billion a year earlier. Analysts had estimated $3.81 billion.