The Estée Lauder Cos. has once more lowered its outlook as a result of a slower than expected recovery in Asia.

Net sales for the complete yr are forecast to diminish between 10 percent and 12 percent, in comparison with the prior yr. It previously forecast a 5 percent to 7 percent drop. Adjusted diluted earnings per common share are expected to fall between 50 percent and 51 percent, compared with the previous forecast for a 27 percent to 29 percent decline.

“Because the shape of recovery from the pandemic for Asia travel retail comes into higher focus, it’s proving to be each much more volatile than we expected and more gradual relative to what we experienced in other regions. We’re, due to this fact, lowering our organic sales and EPS outlook for fiscal 2023 to reflect significantly greater headwinds in our fourth quarter than we expected in February,” said Fabrizio Freda, president and chief executive officer. “While we work through the intense but we imagine temporary headwinds facing Asia travel retail, we’re encouraged by the strong momentum in the remaining of our business.”

While Lauder saw recovery in lots of markets globally, its Asia travel retail business continued to be pressured by the slower than anticipated recovery from the COVID-19 pandemic. In Hainan, while traffic into the island exceeded prior yr levels, conversion of travelers to consumers in prestige beauty lagged. In Korea, the shipments to duty free retailers were pressured owing to the transition to post-COVID regulations as traveling consumers regularly return.

Overall net sales got here in at $3.75 billion for its third quarter ended March 31, a decline of 12 percent from $4.25 billion within the prior-year period, but beating Wall Street estimates of around $3.72 billion. Organic net sales fell 8 percent, primarily driven by Asia travel retail in Hainan and Korea.

Skincare net sales declined 17 percent, primarily reflecting the slower than anticipated recovery of Asia travel retail from the COVID-19 pandemic; makeup net sales were virtually flat; fragrance net sales grew double digits, and hair care net sales increased 3 percent.

On a geographical basis, net sales rose 6 percent within the Americas, but declined 24 percent in Europe, Middle East and Africa. Net sales grew 7 percent in Asia/Pacific, driven by the continued recovery from eased COVID-related restrictions in comparison with the prior-year period, led by Hong Kong, Australia, Japan and mainland China. This was somewhat offset by the slower than anticipated recovery of Dr.Jart+ travel retail in Korea from the COVID-19 pandemic.

The corporate reported net earnings of $156 million, compared with net earnings of $558 million within the prior-year period. Adjusted diluted net earnings per common share declined 75 percent to $.47.

Last week the group accomplished its acquisition of Tom Ford, appointed Guillaume Jesel president and chief executive officer of the brand, while Peter Hawkings has been tapped as creative director. The deal valued the brand at $2.8 billion.