11:07 AM EDT, 08/19/2024 (MT Newswires) -- Estee Lauder ( EL ) issued a downbeat earnings outlook for fiscal 2025 on Monday amid continued softening demand in China, while the cosmetics company's Chief Executive Fabrizio Freda disclosed plans to retire next year.

Freda, who has served as CEO of the beauty giant since 2009, intends to depart at the end of the company's fiscal year 2025. Estee Lauder ( EL ) said its board is "well advanced" in its long-term CEO succession planning process and has evaluated several internal and external candidates for the post.

"I will continue to be fully focused on the execution of our strategic reset and the profit recovery and growth plan, as we continue to address the current challenges," said Freda, who will be available as an advisor to the company in fiscal 2026. The development comes after the MAC makeup brand owner announced last month that Tracey Travis will retire as chief financial officer on June 30, and appointed Akhil Shrivastava as her successor, effective Nov. 1.

In a separate statement, the company said it anticipates per-share adjusted earnings to come in between $2.75 and $2.95 for fiscal 2025 and sales to range between a 1% decrease and a 2% gain on a reported and organic basis. The consensus among analysts on Visible Alpha was for operating EPS of $4.01 and operating net sales of $16.53 billion. In the prior fiscal year, the group's adjusted EPS dropped 25% year over year to $2.59, while adjusted sales fell 2% to $15.61 billion.

The guidance reflects the company's expectations that mainland China and Asia travel retail are generally set to decline on a yearly basis, with gradual improvement in the second half. "We anticipate continued declines in the prestige beauty segment in China, mainly reflecting persistent weak sentiment among Chinese consumers," according to Freda.

"While our sales and profit outlook for fiscal 2025 is disappointing, this year we will make important strides, as we implement our strategy reset to continue rebalancing regional growth, deliver improved annual profitability, and strengthen go-to-market and innovation capabilities to elevate our execution in response to a more competitive market," Freda added.

For the ongoing three-month period, adjusted EPS is projected to be at $0.02 to $0.10, while reported and organic sales are pegged to fall by 3% to 5% year over year. The consensus on Visible Alpha was for first-quarter operating EPS of $0.68 and operating net sales of $3.8 billion.

Estee Lauder's ( EL ) adjusted earnings advanced to $0.64 a share for the three-month period ending June 30 from $0.07 the year before, well above analysts' $0.26 estimate. Non-GAAP sales improved 7% year over year to $3.87 billion, topping the Street's view for $3.82 billion. Organic sales inclined 8% amid growth across all product categories, led by skin care, the company said.

By geography, organic sales in the Americas decreased 5% to $1.01 billion, partially due to ongoing "company-specific" challenges, including its distribution mix and a strong competitive environment. Revenue in Europe, the Middle East and Africa surged 32% to $1.65 billion while Asia Pacific slipped 4%, driven by the decline in mainland China.

Price: 95.73, Change: +0.76, Percent Change: +0.80