12:09 PM EDT, 05/01/2024 (MT Newswires) -- Estee Lauder ( EL ) lowered full-year revenue expectations amid continued softness in the prestige beauty category in China while the cosmetics company's fiscal third-quarter results surpassed analysts' estimates.

The MAC makeup brand owner now expects fiscal 2024 revenue to drop between 2% and 3% year over year and organic sales to decrease 1% to 2%. The company previously projected both metrics to range from 1% down to 1% up. The Capital IQ-polled consensus is for full-year revenue of $15.79 billion on a non-GAAP basis.

The stock was sliding 12% in Wednesday trade.

The reduced organic sales outlook reflects "continued risks from evolving macroeconomic volatility, including continued softness in mainland China and geopolitical tensions in certain areas around the world," Chief Financial Officer Tracey Travis said on a conference call, according to a Capital IQ transcript. "In Asia travel retail, we are also mindful of potential short-term volatility in retail sales related to actions certain retailers are taking to increase their profitability."

Full-year adjusted per-share earnings are seen between $2.14 to $2.24, compared with the prior $2.08 to $2.23 range. The latest range would reflect a decline of 35% to 38%, Estee Lauder ( EL ) said. The consensus is for normalized EPS of $2.24.

For the quarter through March, adjusted EPS jumped to $0.97 from $0.47 a year earlier, well above Wall Street's view of $0.50. Non-GAAP sales increased to $3.94 billion from $3.76 billion, higher than the Street's $3.92 billion view. Organic sales gained 6%, driven by skin care, makeup and fragrance, Estee Lauder ( EL ) said.

Revenue growth, however, was weighed down by lower-than-expected sales in China, "reflecting the impact of ongoing softness in overall prestige beauty, in part due to subdued consumer confidence and softness during holiday and key shopping moments," Travis said on the call.

For the fourth quarter, the company expects reported net sales to increase between 5% and 9% annually, with a 6% to 10% rise in organic revenue. Adjusted EPS is estimated to more than double and range between $0.18 and $0.28. Analysts are projecting $3.97 billion in revenue and $0.75 in normalized EPS.

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