JD.com, one of China's largest e-commerce companies, is facing challenges as its shares hit a record low. Banks and brokers have cut price targets and revenue growth forecasts for the firm, reflecting concerns over the slowdown in consumer spending and the overall state of China's economy [42667a37]. Citi Research has lowered its revenue assumption for JD.com for the third and fourth quarter, citing a muted consumption trend and intense competition. Nomura has also expressed concerns, stating that JD.com has not seen any meaningful improvement in retail and has missed out on the positives from China's stimulus policies [0bf1da53]. In response to the challenging environment, JD.com has filed a police report over online rumors maliciously linked to the company [42667a37].
Estée Lauder shares have plummeted after the company cut its outlook due to a slow recovery in China. The cosmetics giant had previously expected a strong rebound in the Chinese market, but the ongoing impact of the COVID-19 pandemic has led to a more cautious outlook. Estée Lauder's sales in China have been significantly affected by the closure of stores and reduced consumer spending. The company now expects its sales in China to decline in the current quarter. As a result, Estée Lauder's shares fell by more than 8% in premarket trading. The company's disappointing outlook reflects the challenges faced by many businesses in China as they navigate the uncertain economic recovery from the pandemic [2b81387d].
Estée Lauder reported an 11% decrease in organic sales, driven primarily by a 51% drop in the global travel retail business. The company faced headwinds in Asia, particularly in mainland China and Asia travel retail, due to travel restrictions and reduced consumer demand. Estée Lauder is implementing an accelerated profit recovery plan, focusing on optimizing product and category mix, reducing discounts, exercising pricing power, reducing costs, and leveraging investments in supply chain and regionalization. The plan will be operationalized in the second half of fiscal year 2024. Despite the challenges, Estée Lauder remains confident in the long-term prospects of the global prestige beauty industry [2d25d78c].
Chinese consumers are reducing their spending on high-end products from Western brands like Apple, Estée Lauder, and Canada Goose. The restrictive zero-covid policies in China have impacted the economy, leading to high youth unemployment and a struggling property market. As a result, Chinese consumers are opting to shop locally or save their money. Estée Lauder and Canada Goose have both cut their sales forecasts due to China's economic challenges. Apple's sales in China have also dropped, and the company is facing a probe into its manufacturing partner, Foxconn. The future of Western brands in China is uncertain [1d090dd4].
Estée Lauder is cutting 3% to 5% of its global workforce, affecting up to 3,100 workers, as the company aims to increase profits and become more nimble. The layoffs were announced after the company reported falling profits and revenue in the fourth quarter, primarily due to sluggish sales in China. Estée Lauder expects to take restructuring and other charges of between $500 million and $700 million, before taxes, and anticipates annual savings of between $350 million and $500 million, before taxes. The downsizing will be completed by July [91400651].