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Estee Lauder raises annual forecasts on recovering cosmetics demand

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Estee Lauder Cos Inc raised its annual revenue and profit projections on Thursday as price hikes and a recovery in demand for its makeup products blunt the hit from surging costs.

Sales of the cosmetics maker rose in every region in the last three months of 2021 and demand for most of its products grew from pre-pandemic levels, powering the company’s second-quarter earnings above Wall Street expectations.

Makeup sales jumped 11%, continuing their recovery as consumers venturing out more to gatherings after the easing of curbs splurged on Estee’s foundations and MAC lipsticks.

The company also benefited from the reopening of brick-and-mortar stores and a return to office in the United States and the United Kingdom, which led sales growth among its Western markets.

The La Mer maker expects reported net sales to rise between 13% and 16% for the full year, compared with its previous forecast of a 12% to 15% increase.

Still, it continues to face pressure from higher costs wrought by industry-wide supply chain problems and raw material inflation. Its margins were flat year-over-year in the second quarter at 77.9%.

“Inflationary pressures in our supply chain are expected to begin to more prominently impact cost of goods in our fiscal third quarter … however, the benefit of pricing and cost mitigation efforts are helping to offset some of the inflation impacts” Chief Financial Officer Tracey Travis said.

The company forecast current-quarter adjusted profit between $1.55 and $1.65 per share, below expectations of $1.92, according to Refinitiv IBES data.

Edward Jones analyst John Boylan said higher prices and solid demand should help the company, but cautioned the “positive factors might not entirely offset higher costs in the shorter term.”

Estee shares were down about 3% in a weaker overall market, after rising about 39% last year.

(Reporting by Ananya Mariam Rajesh and Aditi Sebastian in Bengaluru; Editing by Aditya Soni)

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Metro Vancouver house prices plunge as interest rate rises – Business in Vancouver

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“Buyers, your time is now,” real estate agent says as home prices fall across the region | Photo: Chung Chow

A forecast from TD Bank that B.C. average home prices will fall by 8.1 per cent by next year appears too optimistic in Metro Vancouver as June sale prices dropped for the third straight month.

The June composite benchmark price for all residential properties in Greater Vancouver was $1,235,900, down 2 per cent from May and a 2.2 per cent decrease over the past three months, reports the Real Estate Board of Greater Vancouver.

Detached house prices are seeing the largest dollar decline, down an average of $37,000 per month since March to a June benchmark price of $2,058,600.

On the bellwether Vancouver West Side market, the median price for a detached house plunged $194,000 from May to $3,063,500 in June.

“We’re seeing downward pressure on home prices as we enter summer due to declining home buyer activity, not increased supply,” said Daniel John, REBGV Chairman.

Total residential sales in Greater Vancouver totalled 2,444 in June 2022, a 35 per cent decrease from June 2021, and a 16.2 per cent decrease from the 2,918 homes sold in May 2022.

The Fraser Valley Real Estate Board (FVREB) processed 1,281 sales in June, down 5.8 per cent compared to May and a 43 per cent plunge compared to June of last year.

“In just two months our market overall has shifted into balance, mainly due to a softening of demand for single-family detached homes,” said FVREB president Sandra Benz, who noted the effect of rising mortgage rates.

Fraser Valley detached house price dropped 3.5 per cent, or $57,855, month-to-month to a June benchmark of $1,653, 000 reports the Fraser Valley Real Estate Board.

The Bank of Canada, which has increased its trend-setting interest rate 75 basis points since March, is expected to jack the rate from 50 to 75 basis points on July 6 to fight inflation.

This will trigger a further decline in home sales and prices, according to TD Bank. In a June 30 report, TD forecast that B.C. will see among the sharpest corrections, with average home prices falling by 8.1 per cent into 2023.

The price drops and increased supply should be welcome by homebuyers, according to real estate agents.

“In most areas of Metro Vancouver and especially at higher price points, it is a buyer’s market now,” said Kevin Skipworth, managing partner with Dexter Associates Real Estate in Vancouver.

He pointed to the city of Vancouver strata sector as especially enticing due to increased supply and falling prices. The benchmark price of a townhouse in the city dropped nearly 2 per cent in June from a month earlier and condo prices fell 2.3 per cent month-to-month, with the biggest decline in the trendy West Side.

“Vancouver’s West Side has seen townhouses and condos go up to five-month’s supply from three months last year,” Skipworth said. “What a switch and an opportunity compared to a year ago. Buyers, your time is now.”

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Is Canada heading for a recession? – CBC News

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$65 oil on the horizon if a recession hits, Citi warns – CNBC Television

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