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Estee Lauder stock sinks on a mixed earnings report, cut sales outlook

The Yahoo Finance Live team discusses Estee Lauder stock tanking after the company cut its sales outlook.

Video transcript

- Shares of Estee Lauder in focus today. They finished in the red as the company lowered its expectations for sales in 2023. The beauty and cosmetics juggernaut now expects fiscal year 2023 sales to decline in a range of 10% to 12%. The company had previously guided for a drop of 5% to 7%. So lowering its expectations for what people are going to do. We had certainly seen the beauty and cosmetics industry perform better during the pandemic. But we are seeing a sharp pullback there. And it's reflected in the stock as well.

- Certainly is reflected in the stock, closing off just about 17%, the biggest drop on record here for this stock. We talked a lot about some of these names being recession proof. These latest results here from Estee Lauder painting a slightly different picture. The real weakness in this report-- some of the weakness, I should say-- coming from Europe sales there, falling just about 26% on a year over year basis.

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Also, some commentary here from executives, the CEO there talking about the recovery in Asia, that that is proving to be both far more volatile than the company had initially anticipated and more gradual than they had expected it to be. So, therefore, the recovery here in the business or the impact that could potentially have on the business here in the short term one of the big reasons why we're seeing that stock drop by as much as it did today.

Let's check in on another name that's moving today-- that was moving today-- and that's CVS, closing in the red after the company reported first quarter results that beat earnings and revenue expectations, but lowered its full-year profit guidance as it ponies up the cash for major acquisitions, which include an $8 billion acquisition of Signify Health and $10.6 billion purchase of Oak Street Health. That, obviously, weighing on the guidance here. And that's why we're seeing shares closed off just over 3%.

- Yeah. We've seen that before. That typically happens with M&A activity. They close one of the deals this week. So certainly seeing that. I mean, it's kind of a normal consequence of acquisitions. The buyer faces a little bit-- they take a little bit of a bath. And that's what they're doing today. Just a 3% drop.

- Yeah. Adjusted EPS there at $2.20.