Financial Data and Key Metrics Changes - For the first quarter, net sales increased by 4.5% to $2.8 billion, with operating profit at 14.1% of sales and diluted earnings per share at $6.70 [6][25][29] - Comparable sales rose by 2.9%, driven by a 2.3% increase in average ticket and a 0.6% increase in transactions [25] - Gross margin decreased by 10 basis points to 39.1%, primarily due to deleverage of store and supply chain fixed costs [27] - SG&A expenses increased by 6.7% to $711 million, with SG&A as a percentage of sales rising to 24.9% [28] Business Line Data and Key Metrics Changes - Fragrance was the strongest performing category, delivering double-digit growth, while skincare and wellness saw high single-digit growth [10] - Hair care was roughly flat, with growth in hair color and accessories offset by declines in hair care tools [11] - Makeup category experienced a slight decrease in comp sales, driven by mass makeup, while prestige makeup remained flat [11][12] Market Data and Key Metrics Changes - Consumer engagement with beauty remains strong, with beauty and wellness prioritized by consumers despite economic pressures [7] - The beauty category is expected to normalize growth rates, projected at 2% to 5% over the next few years [56] Company Strategy and Development Direction - The company is focused on executing the Ulta Beauty Unleashed plan to accelerate performance and maintain leadership [7][19] - Strategic priorities include scaling new businesses, enhancing digital capabilities, and optimizing cost structures [17][19] - The company plans to open stores in Mexico City, Kuwait City, and Dubai later this year, alongside launching an online marketplace [18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the operating environment, acknowledging ongoing consumer pressures and macroeconomic uncertainties [31][32] - The company updated its sales expectations for the year, projecting net sales between $11.5 billion and $11.7 billion, with comp sales growth expected to be flat to up 1.5% [31][32] Other Important Information - The company launched 19 new brands during the quarter, many of which are exclusive to Ulta Beauty [15] - The active loyalty member base reached a record 45 million, up 3% year over year [14] Q&A Session Summary Question: Insights on the Ulta Beauty Unleashed plan - Management highlighted improved in-store execution and marketing efforts as key contributors to the success of the Ulta Beauty Unleashed plan [36][40] Question: Full year outlook and promotional strategies - Management discussed expectations for comp sales growth and the rationality of promotions, emphasizing a cautious approach due to market dynamics [42][45] Question: Newness and innovation pipeline - Management expressed confidence in a balanced pipeline of new products across categories, with a focus on exclusivity [48][50] Question: Demand improvements and competitive intensity - Management noted that competitive intensity remains high, but the company is well-positioned to drive market share through its initiatives [51][54] Question: E-commerce growth drivers - Management attributed the 10% growth in e-commerce to enhancements in digital capabilities and a focus on app engagement [92][93]

Core Insights - Estee Lauder reported $3.55 billion in revenue for the quarter ended March 2025, a year-over-year decline of 9.9% with an EPS of $0.65 compared to $0.97 a year ago, exceeding the Zacks Consensus Estimate of $3.51 billion by 1.22% and delivering an EPS surprise of 124.14% against a consensus estimate of $0.29 [1] Revenue Performance - Net sales in the Americas were $1.05 billion, below the average estimate of $1.08 billion, reflecting a year-over-year decline of 5.8% [4] - Net sales in Asia/Pacific reached $1.14 billion, surpassing the average estimate of $1.02 billion, but still showing a year-over-year decrease of 3.1% [4] - Net sales in Europe, the Middle East & Africa totaled $1.36 billion, slightly below the average estimate of $1.40 billion, with a significant year-over-year decline of 17.6% [4] - Skin Care net sales were $1.81 billion, compared to the average estimate of $1.87 billion, marking a year-over-year decline of 12.3% [4] - Makeup net sales were $1.04 billion, below the average estimate of $1.07 billion, reflecting an 8.9% year-over-year decline [4] - Other net sales were $25 million, exceeding the average estimate of -$38.46 million, with a year-over-year change of -3.9% [4] - Hair Care net sales were $126 million, below the average estimate of $134.79 million, representing an 11.9% year-over-year decline [4] - Fragrance net sales were $557 million, slightly below the average estimate of $574.19 million, with a year-over-year decline of 3.1% [4] Operating Income Analysis - Hair Care reported an operating loss of $13 million, worse than the average estimate of -$7.17 million [4] - Skin Care achieved an operating income of $361 million, slightly above the average estimate of $354.08 million [4] - Other segments reported an operating income of $9 million, significantly better than the average estimate of -$220.82 million [4] - Makeup reported an operating income of $14 million, below the average estimate of $53.44 million [4] Stock Performance - Estee Lauder shares have returned -12.8% over the past month, compared to a -0.7% change in the Zacks S&P 500 composite, with a current Zacks Rank of 3 (Hold) indicating potential performance in line with the broader market [3]

Core Viewpoint - Estee Lauder is expected to report a significant decline in quarterly earnings and revenues, reflecting a downward revision in analysts' projections over the past month [1][2]. Financial Performance - The anticipated earnings per share (EPS) for Estee Lauder is $0.29, representing a 70.1% decline year over year [1]. - Analysts forecast revenues of $3.51 billion, indicating an 11% decrease compared to the previous year [1]. - The consensus EPS estimate has been revised down by 8.5% over the last 30 days [1]. Sales Projections by Category - Net sales for Skin Care are projected to reach $1.87 billion, down 9.3% year over year [4]. - Makeup net sales are expected to be $1.07 billion, reflecting a 6% decrease from the prior year [4]. - Other net sales are estimated at -$38.46 million, indicating a drastic decline of 247.9% year over year [4]. - Hair Care net sales are forecasted at $134.79 million, down 5.7% from the previous year [5]. - Fragrance net sales are projected to be $574.19 million, showing a slight decrease of 0.1% [5]. - Net sales in The Americas are expected to reach $1.08 billion, down 3.1% year over year [5]. - Sales in Europe, the Middle East & Africa are estimated at $1.40 billion, reflecting a 15.1% decline [6]. - Asia/Pacific net sales are projected at $1.02 billion, indicating a 13.3% decrease [6]. Operating Income Projections - Operating income for Skin Care is expected to be $354.08 million, down from $468 million year over year [6]. - Operating income for Other is projected at -$220.82 million, compared to a positive $11 million last year [7]. - Makeup operating income is estimated at $53.44 million, down from $66 million [7]. - Fragrance operating income is expected to be $17.18 million, compared to $29 million in the previous year [8]. Stock Performance - Estee Lauder shares have decreased by 12.2% over the past month, contrasting with the Zacks S&P 500 composite's decline of only 0.2% [8].