Estée Lauder Stock Plummets

by | Aug 20, 2025 | The Doctor's Dose

Estée Lauder Stock Plummets: Weak Guidance Spooks Investors

Estée Lauder stock (EL) plummets after the cosmetics giant reported in-line earnings but issued soft guidance for the fiscal year ahead. Despite adjusted EPS of $0.09 on revenue of $3.41B—both in line with Wall Street forecasts—the market focused on the outlook, sending shares down more than 7% premarket to $83.

Trader’s Note: Price action confirms the rule—guidance often matters more than reported results. Traders should always focus on the forward-looking story.
stée Lauder stock plummets

What’s Driving the Selloff?

  • Soft earnings guidance: FY26 EPS expected between $1.90 and $2.10, well below analyst consensus of $2.20.
  • Tariff impact: New U.S. tariffs expected to trim $100M from the bottom line.
  • Category weakness: Sales fell 12% YoY across skin care, makeup, and hair care. Only fragrance sales (+2%) showed strength.
  • China and competition: Weak demand in China, plus growing competition from Amazon and TikTok-based cosmetics sellers, remain structural challenges.

Why Guidance Overshadows Results

Investors were already pricing in cautious demand trends, but the lower earnings outlook signals tougher times ahead. This is a reminder that in equities, the market doesn’t trade the past—it trades expectations.

Day Trading Playbook for EL

1. Gap-and-Go Setup

With shares gapping down over 7%, traders should look for continuation momentum at the open. A break below premarket lows with rising volume offers a short entry, targeting prior support levels in the low $80s.

2. Gap-Fill Opportunity

If bargain hunters step in, a reclaim of VWAP and the opening range high could trigger a countertrend long, with exits into premarket resistance near $86–$87.

3. Sympathy Plays

Monitor peers in the beauty and consumer discretionary space—such as L’Oréal (OR), Coty (COTY), and Ulta Beauty (ULTA). EL weakness can sometimes spill over into competitors, offering secondary trading opportunities.

4. Risk Management

  • Risk no more than 0.5–1% of equity per trade.
  • Respect stops—especially in volatile premarket gap scenarios.
  • Size down on reversal trades; countertrend setups are lower probability.

Final Thoughts

For long-term investors, Estée Lauder’s brand strength and global reach are undeniable. But for day traders, the headline is simple: Estée Lauder stock plummets because guidance missed the mark. The opportunity lies in trading the reaction, managing risk, and looking for momentum either in the gap continuation or reversal.