Estée Lauder Cos Inc missed analysts' estimates for quarterly sales, as weak demand for its luxury foundations and lipsticks offset growth at the cosmetics maker's skincare brands, with people continuing to work from home.
Sales of cosmetics and makeup products have taken a hit during the COVID-19 pandemic as shoppers stay at home, pressuring Estée Lauder's M.A.C and Bobbi Brown brands.
Lockdowns in certain parts of Western Europe also hampered demand for luxury makeup products, with Estée Lauder's net sales declining across much of the region, notably in the United Kingdom and Spain.
Sales at Estée Lauder's skin care segment jumped 31%, while sales at its makeup segment fell 11%.
Total net sales rose 16% to $3.86 billion for the third quarter ended 31 March, but missed Refinitiv IBES estimates.
"The sales miss was surprising, given the momentum in the business exiting the December quarter," Jefferies analyst Stephanie Wissink said.
Estée Lauder has been doubling down on its investments in skincare fueled by a pandemic-led shift from makeup to self-care and the company remains optimistic about a rebound in makeup demand.
'A Renaissance In Global Makeup'
Chief executive officer Fabrizio Freda told analysts the company was preparing for "a renaissance in (global) makeup", having seen the division show higher sales in Australia, China and Israel, countries which have returned to relative normalcy.
Rival L'Oreal said last month it was seeing signs of a comeback in makeup sales.
Estée Lauder forecast fourth-quarter sales to grow between 44% and 50% on constant currency terms. Analysts had expected sales to rise 48.16%.
The company said it expects a fourth-quarter profit of between 38 cents and 48 cents per share, below estimates of 62 cents.