Estée Lauder has revised its annual sales forecast for the third time in six months due to a slow recovery of travel in China. The luxury cosmetics company has cited the difficulty in the Asian market as the primary cause, as the country accounts for around one-third of the company’s revenue. The company now anticipates a 10-12% decline in sales for the current fiscal year ending in June, which is worse than its previous prediction of a 5-7% fall.
Estée Lauder’s shares have dropped by 16% in early trading before the US markets opened in New York, marking its biggest drop since January 2009 if the decline holds. CEO Fabrizio Freda attributed the company’s poor performance to a “gradual and inconsistent return to travel shopping in Asia,” adding that the headwinds were “significantly greater” than those of just a few months ago.