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Estee Lauder Cuts Full-Year Sales Forecast; Supply Chain Problems, Delta to Blame

Cosmetics maker Estee Lauder recently cut its full-year sales forecast as a result of Delta problems worldwide, as well as current supply chain problems that may affect their overall sales as the year ends. While the Delta variant of COVID-19 cases in the United States has slowed down infections, the variant has experienced a resurgence in other areas of the world, especially in some Eastern markets and in different parts of Europe. As a result, the cosmetics maker is readjusting its full-year sales forecast and expects net sales to rise between 12% and 15% in fiscal 2022. Previously, this forecast was estimated at a 13% to 16% increase.

Estee Lauder — also the owner of M.A.C., La Mer, and Clinique — has experienced some restrictions in sales because of the Delta variant of COVID-19. For example, some of these restrictions have slowed down the demand for Estee Lauder products at many of its brick-and-mortar stores. Estee Lauder and M.A.C. products have recently fallen in sales; however, La Mer and Clinique product sales previously led to a strong first quarter for the company.

With this said, Estee Lauder is still planning for the holiday season and has high expectations. The company has already made steps to ensure its products are in stores, as well as in stock for online orders. The cosmetics maker revealed that it is making sure to make products early and is also using air freight to help avoid any potential delays during the holiday season. However, because freights and transportation of goods have risen during these global supply chain problems, the company did reveal its intent to raise prices on their goods to reflect this.

Global supply chain problems continue to persist and affect how businesses are able to successfully conduct business. Many analysts, including those in the U.S. government, have already warned consumers that they may find less stock on store shelves this holiday shopping season, as a result of these supply chain issues. Ports in the United States have been clogged and many large businesses have tried to create their own, more efficient, way to ensure that their products are easily accessible for consumers once the holiday shopping season officially begins.

The ongoing labor shortage in the United States is also notable to how businesses are running. This labor shortage is also a huge reason why the country specifically is facing so many problems with its supply chain. Companies have struggled to find workers at ports and warehouses. Businesses have also struggled to accurately fill truck driving jobs. Delays in the transportation of goods around the country have, therefore, escalated — and it appears that these delays may continue throughout the holiday shopping season, as well as into the new year.

Estee Lauder still believes it will have a strong holiday shopping season, however, even with all of these major issues out of its control. The company’s makeup category has been the only segment of their corporation to not reach 2019 levels, though the holiday shopping season could finally change this for the business.

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