(Reuters) -Estee Lauder raised its annual profit forecast and beat Wall Street targets for third-quarter sales on Wednesday, as demand for the MAC lipstick maker’s higher-priced skincare and fragrances rebounded in the U.S. and Asia Pacific markets.
Shares of the New York-based company were up 3.8% in premarket trading.
The results hint at a recovery in demand for beauty and cosmetic products in the U.S. after a long bout of inflation had pressured sales of luxury items in the world’s biggest economy.
A pick-up in China demand after several quarters of weakness also underscored customer willingness to splurge on “affordable luxuries” such as fragrances and make-up products.
The company’s third-quarter organic net sales in the Americas grew 1%, with a 3% rise in the Asia Pacific region.
Last month, European rival L’Oreal beat sales expectations and eased concerns about waning demand in the U.S. and China – the two biggest beauty markets.
In an effort to spur demand, Estee has launched newly innovated products like MAC’s Maxima Silky Matte Lipstick and Estée Lauder Re-Nutriv in the North American market.
It has also released key products like The Ordinary, MAC’s skincare brand Hyper Real and Tom Ford’s Café Rose fragrance in markets including China and India to boost sales growth.
It now expects full-year 2024 adjusted profit per share between $2.14 and $2.24, compared with its prior forecast of $2.08 to $2.23.
Net sales rose 5% to $3.94 billion, compared with estimates of $3.91 billion, according to LSEG data.
However, Estee expects full-year 2024 sales to fall 1% to 2%, compared with its previous forecast of a 1% decrease to a 1% increase.
The Clinique skincare maker said Mainland China net sales grew in the low single digits, but the region faces persistent weakness in the overall prestige beauty space due to subdued consumer confidence and softness during holiday and other key shopping periods.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Devika Syamnath)
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