Estee Lauder (HAND) shares gained 20% on Thursday after the luxury beauty products maker warned of softness in the Chinese and Asian travel markets, withdrew its full-year guidance and cut its dividend.

The news comes a day after the company appointed Chief Executive Stéphane de La Faverie to its new entity. Chief Executive Officer (CEO)Valid as of January 1, 2025.

Estée Lauder reported that fiscal 2025 first-quarter revenue fell 4% year over year to $3.36 billion, while analysts surveyed by Visible Alpha were expecting $3.37 billion. Fixed Earnings per share (EPS) It beat estimates by $0.14.

Decline in Organic Sales Driven by ‘Worning Consumer Sentiment in China’

organic sales The company said this was mainly due to “worsening consumer sentiment in China, leading to further softening in the overall prestige beauty in mainland China and lower conversion rates in Asian travel retail and Hong Kong SAR.” Organic sales were also dragged down by “lower replenishment orders in Asian travel retail, including inventory pressure due to the continued slowdown in the retail market.”

Estée Lauder said it is cutting its quarterly dividend from $0.66 to $0.35 due to the “complex prestige beauty landscape” and uncertainty about the recovery of the Chinese and Asian travel markets.

In addition, these factors and the leadership change were also factored into the decision to withdraw the 2025 fiscal outlook. It had previously forecast adjusted EPS to be between $2.75 and $2.95 and revenue to be “between a 1% decrease and a 2% increase from the prior year.”

Shares of Estée Lauder fell to their lowest level in more than nine years.