Estee Lauder's Trading Volume Surges 87% to 75th in Market as Stock Plummets 3.67% on Restructuring Costs and Weak Sales

On August 20, 2025, The saw a trading volume of 1.09 billion, a 87.19% increase from the previous day, ranking 75th in the market. The stock closed down 3.67% as investors reacted to revised guidance and operational challenges.

Estee Lauder reported fourth-quarter organic net sales fell 13%, driven by weak performance in skincare, makeup, and travel retail. The company cited $100 million in tariff-related costs for 2026 and announced restructuring charges of $1.2–1.6 billion. Management outlined plans to reduce inventory, cut promotions, and shift production to Japan and Europe to mitigate U.S.-China trade pressures. Analysts noted the luxury sector’s struggles with declining demand, particularly in the U.S., China, and Europe.

CEO Stéphane de La Faverie emphasized cost-cutting under the Profit Recovery and Growth Plan, including 5,800–7,000 job cuts. Despite a $546 million quarterly loss, the firm projected 2026 adjusted EPS of $1.90–$2.10, below the $2.21 consensus. While mainland China and Japan saw category gains, U.S. and European markets remained soft. Travel retail, which accounts for two-thirds of the fourth-quarter sales decline, faces ongoing challenges with weak conversion rates.

Estee Lauder’s strategy includes expanding duty-free presence in the Americas and accelerating product launches in skincare. However, investors remain skeptical about the path to profitability, with the stock trading at 40 times forward earnings. The company highlighted gross margin expansion to 72% but warned of continued volatility in external factors like inflation and consumer spending.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to now delivered moderate returns. The 1-day return was 0.98%, with a total return of 31.52% over 365 days. This indicates the strategy captured some short-term momentum but also reflected market volatility and potential timing risks.