Estee Lauder tops fourth-quarter estimates, disappoints on fiscal 2023 outlook

Yahoo Finance Live anchors discuss fourth-quarter earnings for Estée Lauder.

Video transcript

JULIE HYMAN: On this show for Brian Sozzi and I.

[WALL STREET BELL CHIMING]

You talked about me trying to call my kids down to dinner, talking about Sozz's feelings about Kohl's, and we've got the opening bell. It's a change for us.

BRIAN SOZZI: I wonder how they feel. They look happy.

JULIE HYMAN: Chance for a fresh start every day, Sozz.

BRIAN SOZZI: Yeah, fresh start.

[LAUGHTER]

JULIE HYMAN: [INAUDIBLE] happier.

BRIAN SOZZI: Yes.

JULIE HYMAN: And it looks like we've got a potentially mixed open here on this Thursday morning here. As we watch a lot of focus on some of these individual movers, we had this big rally, of course, over the past couple of months that now appears to be going a little more sideways. Not unusual for August. Although, August sometimes is subject to weirdness in the market. Weird--

BRIAN SOZZI: Bed Bath & Beyond--

JULIE HYMAN: --events coming in the market.

BRIAN SOZZI: --there's some weirdness. Suddenly--

JULIE HYMAN: Well, I mean--

BRIAN SOZZI: --Fed minutes are like, oh my God, the holy grail report.

JULIE HYMAN: I mean more macro weirdness. I guess that's-- I guess the Fed minutes can fall into that. So we've got a very little change market here this morning. But obviously, as we've been talking about, that masks some pretty crazy action beneath the surface.

So another individual mover we're watching is Estée Lauder. And that stock is also moving more than the broader market here, topping expectations in its latest quarter. Saw a 9% increase in full year net sales. But first-quarter earnings per share, its outlook for fiscal 2023 came in below estimates. And Estée Lauder attributing the lackluster outlook to impacts related to Russia's invasion of Ukraine and foreign currency translation.

So like Tapestry, kind of more of a mixed picture here if you look at the differential between the outlook. I mean, that first-quarter forecast is pretty well below estimates. $1.32 is the upper end. $1.85 is what analysts were looking for here. I know you've been focusing a lot on makeup recently.

BRIAN SOZZI: [LAUGHS] Well, it comes with the gig, right?

JULIE HYMAN: No, but I mean-- right, well, and it's resisting-- yes, it's true. And it's resistance to economic downturns, typically.

BRIAN SOZZI: It's been pretty-- it's been tracking pretty well. And for all things makeup, I go to Jefferies analyst Stephanie Wissink, covers the industry very extensively. She was on yesterday talking about Target. I just got her note on Estée Lauder, Julie. So she's leaving a buy rating on the company. But she does note this, "The extreme performance variances by market category and quarter have taken the Estée Lauder model into a phase of lower visibility and less predictability." Perhaps that's why you're seeing the stock here under pressure.

JULIE HYMAN: And there also have been some-- I mean, this was something that was known about for people who track the company. But there were termination of license agreements for various brands, right? Where you're talking about product lines, fragrance, et cetera-- Donna Karan New York, DKNY, Michael Kors, Tommy Hilfiger, Zegna. And that was effective as of June 30. So that also affected the numbers here.

BRIAN SOZZI: And we were usually talking about perfumes. The price-- want to see inflation? I went into a Bloomingdale's store, $540 for a small bottle of Tom Ford cherry cologne. I left it there. To me, that just seemed way too high.

JULIE HYMAN: It will change your life. It'll change your life, Sozz.

BRIAN SOZZI: It did smell really good.

JULIE HYMAN: If it costs that, it better change your life.

BRIAN SOZZI: So it smells really good, I might actually just go treat it to myself.