Estee Lauder among multinationals hit by China lockdowns

Nov 2, 2022, 6:10 AM | Updated: 3:08 pm
FILE - In this Nov. 2, 2011 file photo, Estee Lauder products are displayed at a department store i...

FILE - In this Nov. 2, 2011 file photo, Estee Lauder products are displayed at a department store in S. Portland, Maine. Estee Lauder's fiscal first-quarter performance topped Wall Street's view, Wednesday, Nov. 2, 2022, but the beauty products company lowered its full-year outlook partly on concerns tied to the zero-tolerance COVID-19 policy in China, a key market for its sales. (AP Photo/Pat Wellenbach, File)

(AP Photo/Pat Wellenbach, File)

The devastating effects of COVID-19 lockdowns in China overshadowed a strong quarter at Estee Lauder and shares of the cosmetics company tumbled before the opening bell Wednesday.

International companies that rely on sales in China have been hammered by Beijing’s “Zero COVID” policies that have mandated strict periods of isolation for millions of people.

On Wednesday, Estee Lauder lowered its annual adjusted per-share profit expectations from between $7.39 and $7.54, to between $5.25 and $5.40. That’s far below Wall Street projections for per-share profits of $7.35 per share, according to a FactSet survey.

Shares fell 6% in early trading.

Bigger companies have not been spared from the effects of China’s strict virus policies.

Access to an industrial zone in the central Chinese city of Zhengzhou was suspended Wednesday after the city reported 64 coronavirus cases and workers who assemble Apple iPhones left their factory in the zone following outbreaks.

Starbucks reports earnings Thursday. In its last quarterly financial report, the company said same store sales in China plunged 44%.

McDonald’s which reported declining comparable store sales in China late last month, said 33 cities with 65 million residents were either in full or partial COVID-19 lockdowns during the quarter.

There have been reports that China may soon ease restrictions in its fight to curtail infections, which drove markets there higher Wednesday.

“The power of social media and retail investors was evident after stories circled on China’s zero COVID policy and if Beijing is preparing to phase it out,” Stephen Innes of SPI Asset Management said in a commentary.

“Despite new lockdowns being announced … a China reopening is the biggest ticket in town, and it’s better to show up early rather than late to the reopening party,” Innes said.

Aside from China’s COVID-19 restrictions, Estee Lauder said Wednesday that travel curbs and tightening inventory in Asia and the U.S. will likely weigh on the company during the first half of the year.

The New York City company earned $489 million, or $1.35 per share, in its fiscal first quarter. Removing restructuring costs, earnings were $1.37 per share, edging out Wall Street projections by 2 cents, according to analysts polled by Zacks Investment Research.

Estee Lauder Cos. foresees second-quarter earnings in a range of $1.19 to $1.29 per share. Analysts surveyed by Zacks had been projecting $2.84 per share.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

The Democratic National Committee Rules and Bylaws Committee discuss proposed changes to the primar...
Associated Press

Dems move to make South Carolina, not Iowa, 1st voting state

WASHINGTON (AP) — Democrats voted Friday to remove Iowa as the leadoff state on the presidential nominating calendar and replace it with South Carolina starting in 2024, a dramatic shakeup championed by President Joe Biden to better reflect the party’s deeply diverse electorate. The Democratic National Committee’s rule-making arm made the move to strip Iowa […]
20 hours ago
Associated Press

Republican Kent contests results of Washington state race

VANCOUVER, Wash. (AP) — Republican Joe Kent’s campaign said Friday it intends to request a machine ballot recount of the counties within southwest Washington state’s 3rd Congressional District. “We believe the election workers did their best to ensure a fair election and count the ballots accurately,” his campaign said in a statement. “But given the […]
20 hours ago
FILE - In this May 24, 2004 file photo, a Mount Graham red squirrel darts through trees on Mount Gr...
Associated Press

Endangered red squirrel found in Arizona sees increase in population

The latest survey shows another increase in the population of the endangered Mount Graham red squirrel in the Pinaleno Mountains of Arizona.
20 hours ago
FILE - Johnny Hincapie raises his fist as he leaves the courthouse in New York, Jan. 25, 2017. Atto...
Associated Press

Man to receive almost $18 million for wrongful NY conviction

A man who was freed in 2015 after spending a quarter-century in prison for an infamous tourist killing will receive nearly $18 million in legal settlements from the city and state of New York, his attorneys confirmed Friday. Lawyers for Johnny Hincapie said it marks one of the largest settlements for a wrongful conviction in […]
20 hours ago
Associated Press

Mamie King-Chalmers, woman in civil rights photo, dies at 81

DETROIT (AP) — Mamie King-Chalmers, who as a young Black woman appeared in an iconic photo about civil rights struggles in Alabama, has died at the age of 81. She died Tuesday in Detroit, her home since the 1970s, daughter Lasuria Allman said. A cause wasn’t disclosed. King-Chalmers, 21 at the time, was one of […]
20 hours ago
Associated Press

Nebraska man gets prison for leaving noose for coworker

LA VISTA, Neb. (AP) — A former employee at the Oriental Trading Co. has been sentenced to prison for leaving a noose on a floor scrubber that a Black colleague was set to use. The Nebraska U.S. Attorney’s office said Bruce Quinn, 66, was sentenced Friday to four months in prison and one year of […]
20 hours ago

Sponsored Articles

...
Quantum Fiber

How high-speed fiber internet can improve everyday life

Quantum Fiber supplies unlimited data with speeds up to 940 mbps, enough to share 4K videos with coworkers 20 times faster than a cable.
...
SCHWARTZ LASER EYE CENTER

Key dates for Arizona sports fans to look forward to this fall

Fall brings new beginnings in different ways for Arizona’s professional sports teams like the Cardinals and Coyotes.
...
Day & Night Air Conditioning, Heating and Plumbing

Ways to prevent clogged drains and what to do if you’re too late

While there are a variety of ways to prevent clogged drains, it's equally as important to know what to do when you're already too late.
Estee Lauder among multinationals hit by China lockdowns