Estee Lauder cuts profit forecast on Hong Kong, China troubles; shares fall

The Estee Lauder section of the Nordstrom flagship store is seen during a media preview in New York, U.S., October 21, 2019. REUTERS/Shannon Stapleton

(Reuters) – Estee Lauder Cos Inc (EL.N) cut its full-year profit forecast on Thursday, expecting a hit from the ongoing protests in Hong Kong and slowing growth in China and travel retail, sending its shares down 5%.

The company now expects 2020 adjusted profit between $5.85 and $5.93 per share compared with its prior range of $5.90 to $5.98.

Estee Lauder also cited risks from uncertainty around Brexit to its full-year forecast.

Luxury goods companies and retailers have felt the pinch from the months-longs pro-democracy demonstrations in Hong Kong that forced some shops to temporarily close down, and kept shoppers from one of the world’s most vibrant shopping destinations.

This led to a decline in Estee Lauder’s net sales from Hong Kong in the first quarter.

Over all, net sales climbed 11% to $3.90 billion. Excluding items, Estee Lauder earned $1.68 per share.

Analysts on average had expected a revenue of $3.85 billion and adjusted profit of $1.60 per share, according to IBES data from Refinitv.

Reporting by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli

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