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Estee Lauder Shuts Stores, Draws for Credit Amid Coronavirus Fears
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The coronavirus outbreak is spreading at an alarming rate. The cosmetics space is under major pressure with companies shutting stores, limiting store hours and withdrawing their guidance. In fact, companies are bound to keep stores shut for extended durations with the situation getting worse with each day. Moreover, companies are bearing the brunt of supply-chain bottlenecks due to travel restrictions imposed to contain further spread of the deadly virus. Certainly, this is a blow to the travel retail network, which plays a vital role in the sales of cosmetic and beauty players.
Incidentally, The Estee Lauder Companies Inc. (EL - Free Report) informed that most of the retail stores across the Americas, Europe and the Middle East & Africa (operated by the company as well as its customers) have been shut since mid-March. Also, air travel has been restricted, which is hurting Estee Lauder’s travel retail operations. Nevertheless, most retail stores in the Asia/Pacific region have been reopening over the last few weeks.
Well, store closures have been undertaken by many other companies like Ulta Beauty (ULTA - Free Report) , Sally Beauty (SBH - Free Report) and Nordstrom (JWN - Free Report) to name a few.
Meanwhile, Estee Lauder is witnessing higher online sales growth worldwide amid the coronavirus crisis. Also, most of the company’s manufacturing facilities are operational right now, but in limited capacity. Apart from these factors, the company has undertaken various measures to enhance its financial flexibility during the crisis. In this regard, Estee Lauder has drawn down the full amount under its $1.5-billion revolving credit facility. Also, management has issued $700-million aggregate principal amount of 2.6% senior unsecured notes that are due in 2030.
Further, the company has been undertaking expense-control measures, postponing various capital investments, suspending non-essential recruits along with enhancing advertising and promotion expenditures. Among other moves, Estee Lauder temporarily suspended its share buyback plans as well as cancelled plans to give out its next quarterly dividend due in June.
Keeping along these lines, Estee Lauder’s executive chairman, president and members of executive leadership team among others are taking salary cuts starting from May 1 until Oct 31, due to the coronavirus crisis. Further, the company’s board of directors will give up their cash retainers till November.
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Estee Lauder Shuts Stores, Draws for Credit Amid Coronavirus Fears
The coronavirus outbreak is spreading at an alarming rate. The cosmetics space is under major pressure with companies shutting stores, limiting store hours and withdrawing their guidance. In fact, companies are bound to keep stores shut for extended durations with the situation getting worse with each day. Moreover, companies are bearing the brunt of supply-chain bottlenecks due to travel restrictions imposed to contain further spread of the deadly virus. Certainly, this is a blow to the travel retail network, which plays a vital role in the sales of cosmetic and beauty players.
Incidentally, The Estee Lauder Companies Inc. (EL - Free Report) informed that most of the retail stores across the Americas, Europe and the Middle East & Africa (operated by the company as well as its customers) have been shut since mid-March. Also, air travel has been restricted, which is hurting Estee Lauder’s travel retail operations. Nevertheless, most retail stores in the Asia/Pacific region have been reopening over the last few weeks.
Well, store closures have been undertaken by many other companies like Ulta Beauty (ULTA - Free Report) , Sally Beauty (SBH - Free Report) and Nordstrom (JWN - Free Report) to name a few.
Meanwhile, Estee Lauder is witnessing higher online sales growth worldwide amid the coronavirus crisis. Also, most of the company’s manufacturing facilities are operational right now, but in limited capacity. Apart from these factors, the company has undertaken various measures to enhance its financial flexibility during the crisis. In this regard, Estee Lauder has drawn down the full amount under its $1.5-billion revolving credit facility. Also, management has issued $700-million aggregate principal amount of 2.6% senior unsecured notes that are due in 2030.
Further, the company has been undertaking expense-control measures, postponing various capital investments, suspending non-essential recruits along with enhancing advertising and promotion expenditures. Among other moves, Estee Lauder temporarily suspended its share buyback plans as well as cancelled plans to give out its next quarterly dividend due in June.
Keeping along these lines, Estee Lauder’s executive chairman, president and members of executive leadership team among others are taking salary cuts starting from May 1 until Oct 31, due to the coronavirus crisis. Further, the company’s board of directors will give up their cash retainers till November.
We note that shares of this Zacks Rank #3 (Hold) company have declined 15.9% in the past six months compared with the industry’s decline of 37.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>