Cosmetics maker Estée Lauder Cos has reported a smaller-than-expected rise in quarterly sales, hurt by a slowdown in sales in the Americas as fewer customers visited department stores and tourist spending declined.

Up to Thursday’s close, the stock had risen 13.5 percent in the past year, but it fell in the wake of the announcement.

Sales in the Americas, its biggest market, rose 1.4 per cent to $1.1 billion (€971 million) on a reported basis, its slowest growth in four quarters. Lower retail traffic mainly affected the company’s “heritage” brands Estée Lauder and Clinique, and a few MAC freestanding stores.

Weakening demand

Demand for its skincare products continued to weaken, as the company cited overall global slowdown in the category. Sales from its namesake brand and Clinique were also hurt by lower sales in some Asia-Pacific countries, mainly Hong Kong.

“Social and political issues, currency volatility and economic challenges are affecting consumer behaviour in certain countries, such as Hong Kong, France and some emerging markets,” the company said.

Rival L’Oréal earlier reported second-quarter sales growth marginally below forecast as the company said Western Europe was being held back due to a “very difficult market in France”.

Net income attributable to the company fell to $93.5 million (€82.6 million), or 25 cents a share, in the quarter, from $153 million, or 40 cents a share, a year earlier.

Net income was hurt by restructuring and other charges.

Excluding items, the company earned 43 cents a share.

Net sales rose to $2.65 billion from $2.52 billion.

Analysts on average had expected a profit of 40 cents per share and revenue of $2.66 billion, according to Thomson Reuters I/B/E/S. – (Reuters)