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They stated that results from China Tourism Group Duty-Free and takeaways from an expert call held by one of the firm’s colleagues both suggest that beauty sales in Hainan are falling short of their prior expectations.
“We lower our FY24 and FY25 estimates meaningfully in consideration of this dynamic,” said the analysts. “We remain Buy-rated, however, as we continue to view EL as structurally growth advantaged HPC company over the long term (see our recently published HPC 2030 Global Growth Guide for more) and continue to see a compelling recovery inflection beginning in 2H24.”
Even so, the Goldman Sachs analysts stated that they would not be surprised if the stock remained range-bound, or worse, in the near term due to low visibility and the risk of disappointing guidance when it reports next quarter.
EL shares are down more than 2% Tuesday.
