THE WHAT?  The Estée Lauder Companies Inc. reported a 7% decline in net sales to $4.28 billion for the quarter ended December 31, 2023, from $4.62 billion in the same period the previous year.

THE DETAILS  Organic net sales decreased by 8%, affected by challenges in Asia travel retail, ongoing softness in mainland China’s prestige beauty sector, and a 1% impact from business disruptions in Israel and the Middle East. Despite these challenges, there was growth in several markets across Asia/Pacific, Europe, the Middle East & Africa, and Latin America. Net earnings for the quarter were $313 million, down from $394 million in the prior-year period, with an increased effective tax rate of 37.6% due to changes in the geographical mix of earnings and the impact of share-based compensation.

THE WHY? The company met its organic sales outlook and exceeded profitability expectations, with strong performances from brands such as The Ordinary, La Mer, Clinique, Le Labo, and Jo Malone London. Estée Lauder anticipates a return to strong organic sales growth and improved profitability in the second half of fiscal 2024 and has announced an expansion of its Profit Recovery Plan to include a restructuring program.