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Estee Lauder to Cut 3% to 5% of Its Employees after Sales, Profit Slide in Its Most Recent Quarter

The Estee Lauder section of the Nordstrom flagship store is seen during a media preview in New York, US, October 21, 2019. (Reuters)
The Estee Lauder section of the Nordstrom flagship store is seen during a media preview in New York, US, October 21, 2019. (Reuters)
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Estee Lauder to Cut 3% to 5% of Its Employees after Sales, Profit Slide in Its Most Recent Quarter

The Estee Lauder section of the Nordstrom flagship store is seen during a media preview in New York, US, October 21, 2019. (Reuters)
The Estee Lauder section of the Nordstrom flagship store is seen during a media preview in New York, US, October 21, 2019. (Reuters)

Estee Lauder is cutting 3% to 5% of its global workforce as part of a restructuring program that aims to increase profits and become more nimble in a challenging international environment.

The layoffs were announced Monday as the New York cosmetic giant reported falling profits and revenue in the second quarter, and trimmed its annual profit forecast.

Business was dragged down by sluggish sales in China as well as disruptions in Israel and other parts of the Middle East.

The downsizing, which will affect as many as 3,100 workers, will be made by July, Estee Lauder said. The company employed 62,000 workers worldwide, according to its latest regulatory filing.

The company, whose brands include Clinique, Tom Ford and La Mer, said it expects to take restructuring and other charges of between $500 million and $700 million, before taxes, consisting of employee-related costs, contract terminations, asset write-offs and other costs associated with implementing the initiative.

Estee Lauder expects the restructuring program to deliver annual savings of between $350 million and $500 million, before taxes, Estee Lauder said.

The company now expects the job cuts and the broader restructuring plan to drive incremental operating profit of $1.1 billion to $1.4 billion over the next few years. That's an increase from the $800 million to $1 billion announced late last year.

The company posted sales of $4.28 billion during the quarter ended Dec. 31. That was down 7% from $4.62 billion in the year-ago period. It earned profits of $313 million, or 87 cents for the period, down from $394 million, or $1.09 per share, in the year-ago period. Adjusted profit per share results were 88 cents, which far exceeded the per-share earns of 54 cents that Wall Street was expecting, according to FactSet. It also topped revenue expectations.

Estee Lauder now sees adjusted earnings of $2.08 to $2.23 a share for the year, down from a prior forecast of $2.17 to $2.42. Analysts expected earnings per share for the current fiscal year to be $2.32 announced in November.

Estee Lauder joins a growing list of companies that have announced layoffs in recent weeks including some well-known household names like Amazon, Google and UPS. Yet American businesses and other employers added a blistering 353,000 jobs in January — the largest surge in hiring in a year even as the US Federal Reserve raised interest rates repeatedly to cool the US economy and tame inflation.

Estee Lauder's share rose $17.80, or more than 13%, to $151.92 per share in late morning trading.

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Fashion

80-year-old LL Bean Staple Finds New Audience as Trendy Bag

Gracie Wiener poses with some of her tote bags in Washington Square Park in New York, Wednesday, July 17, 2024, (AP Photo/Pamela Smith)
Gracie Wiener poses with some of her tote bags in Washington Square Park in New York, Wednesday, July 17, 2024, (AP Photo/Pamela Smith)
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80-year-old LL Bean Staple Finds New Audience as Trendy Bag

Gracie Wiener poses with some of her tote bags in Washington Square Park in New York, Wednesday, July 17, 2024, (AP Photo/Pamela Smith)
Gracie Wiener poses with some of her tote bags in Washington Square Park in New York, Wednesday, July 17, 2024, (AP Photo/Pamela Smith)

L.L. Bean created it 80 years ago to haul heavy blocks of ice. Now it's a must-have summer fashion accessory, The Associated Press reported.

The simple, sturdy canvas bag called the Boat and Tote is having an extended moment 80 years after its introduction, thanks to a social media trend in which they're monogrammed with ironic or flashy phrases.

New Yorker Gracie Wiener helped get it started by ordering her humble bags from L.L. Bean monogrammed with “Psycho” and then “Prada,” the pricey Italian luxury brand, instead of just her name or initials, and posting about them on Instagram. Then others began showcasing their own unique bags on TikTok.

Soon, it wasn’t enough to have a bag monogrammed with “Schlepper,” “HOT MESS,” “slayyyy” or “cool mom.” Customers began testing the limits of the human censors in L.L. Bean’s monogram department, which bans profanity “or other objectionable words or phrases,” with more provocative wording like “Bite me,” “Dum Blonde” and “Ambitchous.”

Social media fueled the surge, just as it did for Stanley’s tumblers and Trader Joe’s $2.99 canvas bags, which were once selling on eBay for $200, said Beth Goldstein, an analyst at Circana, which tracks consumer spending and trends.
The tote’s revival came at a time when price-conscious consumers were forgoing expensive handbags, sales of which have weakened, and L.L. Bean’s bag fit the bill as a functional item that’s trendy precisely because it’s not trendy, she said. L.L. Bean's regular bags top out at about $55, though some fancier versions cost upward of $100.
“There’s a trend toward the utilitarian, the simple things and more accessible price points,” she said, and the customization added to the appeal: “Status items don’t have to be designer price points.”

L.L. Bean’s tote was first advertised in a catalog as Bean’s Ice Carrier in 1944 during World War II, when ice chests were common. Then they disappeared before being reintroduced in 1965 as the Boat and Tote.

These days, they’re still made in Maine and are still capable of hauling 500 pounds of ice, but they are far more likely to carry laptops, headphones, groceries, books, beach gear, travel essentials and other common items.

Those snarky, pop-oriented phrases transformed them into a sassy essential and helped them spread beyond Maine, Massachusetts’ Cape Cod and other New England enclaves to places like Los Angeles and New York City, where fashionistas like Gwyneth Paltrow, Reese Witherspoon and Sarah Jessica Parker are toting them — but not necessarily brandished with ironic phrases.

“It’s just one of those things that makes people smile and makes people laugh, and it’s unexpected,” said Wiener, who got it all started with her @ironicboatandtote Instagram page, which she started as a fun side hustle from her job as social media manager for Air Mail, a digital publication launched by former Vanity Fair Editor-in-Chief Graydon Carter.

The folks at L.L. Bean were both stunned and pleased by the continuing growth. For the past two years, the Boat and Tote has been L.L. Bean’s No. 1 contributor to luring in new customers, and sales grew 64% from fiscal years 2021 to 2023, spokesperson Amanda Hannah said.

The surge in popularity is reminiscent of L.L. Bean’s traditional hunting shoe, the iconic staple for trudging through rain and muck, which enjoyed its own moment a few years back, driven by college students.