Estee Lauder (NYSE:EL) jumped 4.2% Monday following a Sunday report from the New York Post that activist investor Nelson Peltz was contemplating a “possible shakeup” at the beauty products company. The campaign would reportedly target CEO Fabrizio Freda.
Estee Lauder, the parent company of Clinique, Jo Malone, Aveda, and Bobbi Brown, has come under pressure in the past few days. The company’s stock plunged by over 17% on Wednesday after the company published relatively weak financial results.
The results revealed that organic sales dropped by 8% while earnings per share fell by 75% to 47 cents. In its statement, the firm attributed this situation to challenges in Asia’s travel retail business. Organic sales in APAC jumped by 7% while in EMEA, they dropped by 24%.
In all, Estee Lauder’s fragrance revenue rose by 14% while skincare dropped by 17%. The firm expects its business to go through challenges this year, with China’s economy recovering at a slower pace than expected.
It also expects to be hit by higher inflation and tighter inventories in key regions. The CFO said:
“We are lowering our full-year outlook to reflect continued decline in net sales in Asia travel retail we plan to invest in markets where traffic and consumption are returning, and expect to return to overall net sales growth in the fourth quarter.”
EL shares popped $3.12, or 1.5% to $206.66.
