Estée Lauder Cos. (EL) saw its stock surge 15% in pre-market trading after reporting fiscal third-quarter earnings and revenue that topped Wall Street expectations, signaling its turnaround plan is gaining traction.
"The results surpassed Wall Street expectations," Zacks Investment Research noted in a report, highlighting the significant earnings beat.
The beauty products giant posted net sales of $3.71 billion, beating the $3.7 billion average estimate from eight analysts surveyed by Zacks. Adjusted earnings per share came in at 91 cents, well ahead of the consensus forecast of 66 cents per share. This compares to a net income of $89 million, or 24 cents per share, on an unadjusted basis.
The strong results come as the company deepens its restructuring efforts. Alongside the earnings, Estée Lauder announced it will expand its job cuts to as many as 10,000 positions, up from a previous target of 7,000, as part of a broader overhaul led by CEO Stephane de La Faverie.
The expanded restructuring plan aims to generate an additional $200 million in savings. The company, which owns popular brands like La Mer and The Ordinary, is working to streamline operations and improve profitability amid a challenging global market. The successful quarter was driven by improving sales in China and Europe, according to a report from Reuters.
For the full year, Estée Lauder now expects earnings in the range of $2.35 to $2.45 per share, providing a clearer outlook for investors.
The strong earnings beat and updated restructuring plan suggest that management's efforts to reset the company's cost base and revive growth are beginning to yield results. Investors will now be closely watching the implementation of the expanded job cuts and whether the sales momentum in key markets like China can be sustained.
This article is for informational purposes only and does not constitute investment advice.
