Estee Lauder Companies Inc. (NYSE: EL) witnessed a 5.05% plummet in its stock price on Wednesday, February 5th, 2025, as the company reported disappointing second-quarter fiscal 2025 results and continued to face challenges in the Asia-Pacific region and travel retail business.

The prestige beauty giant reported a 6% decline in organic net sales for the quarter, driven by an 11% decrease in Asia-Pacific due to subdued consumer sentiment in Mainland China, Korea, and Hong Kong. The company also saw weak retail sales trends in its Asia travel retail business, pressuring overall performance.

Estee Lauder's operating income declined 20% to $462 million, while the operating margin contracted 200 basis points to 11.5%, compared to 13.5% a year ago. Diluted earnings per share (EPS) fell to $0.62, down from $0.88 in the prior-year quarter.

To address the challenges, the company is expanding its "Profit Recovery and Growth Plan" (PRGP), including a restructuring program that will result in a net reduction of 5,800 to 7,000 positions globally. The expanded PRGP is expected to generate total charges of $1.2 billion to $1.6 billion and annual gross savings of $800 million to $1 billion before taxes.

For the third quarter of fiscal 2025, Estee Lauder anticipates organic net sales to decrease by 10% to 8%, primarily due to a strong double-digit decline in the global travel retail business. The company expects adjusted EPS of $0.20 to $0.30 for the third quarter, reflecting the anticipated sales decline.