Investing.com – Estee Lauder stock (NYSE:EL) fell 3% in Tuesday’s premarket trading as supply chain woes and a resurgent coronavirus in key markets forced the cosmetics maker to lower its guidance for the year.
The company warned that higher transportation and logistics costs could affect sales and operating expenses in the remaining part of the financial year.
The maker of La Mer beauty products now expects annual net sales to rise by 13.5% at midpoint, shaving off a neat 100 basis points from the forecast it gave earlier. One basis point is one-hundredth of a percent.
Sales of skincare products, makeup and fragrances rose in the first quarter but would have been higher had renewed restrictions due to the Delta variant not been put in place in some key markets. These included some Eastern markets, parts of Europe and South America.
The company said it will aim to overcome higher costs through price increases, better product mix and the use of air freight and less congested ports. Gross margin this time fell by 90 basis points.
Net sales in the first quarter rose 23% from the same period last year, to $4.39 billion. Every region showed growth as economies reopened and people spent more on grooming to look and feel better.
Adjusted profit per share was $1.89, and like sales, was higher than estimates.