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Feb 6 (Reuters) - Estee Lauder Cos Inc on Thursday cut its profit forecast for fiscal 2020, citing the coronavirus epidemic in China, a key market for the maker of Clinique skincare products.
The outbreak of the new virus in the city of Wuhan late last year has hit the country’s retail industry, forcing businesses to temporarily shut stores and factories, with luxury goods makers among the most affected sectors.
The epidemic adds to the troubles the company has faced in the Asia Pacific region as months of protests in Hong Kong also weighed on sales.
Estee Lauder said it has seen a significant decline in air travel and consumer traffic in key shopping and tourist areas, adding markets favored by tourists are likely to experience the greatest impact from the outbreak.
The company now expects adjusted earnings of $5.60 to $5.70 per share, compared with its previous estimate of $5.85 to $5.93. Analysts on average were expecting earnings of $5.94 per share, according to IBES data from Refinitiv.
The company also trimmed the low end of its sales growth forecast. It now expects sales to grow 6% to 8%, compared with its prior range of 7% to 8% growth.
However, Estee Lauder’s quarterly sales of $4.62 billion handily beat Wall Street expectations of $4.35 billion, driven by strong demand for its skincare brands La Mer and Origin. (Reporting by Praveen Paramasivam in Bengaluru; Editing by Anil D’Silva and Maju Samuel)