In the past week, Estée Lauder Companies saw its share price fall by 13% amid broader market turmoil, with the Dow Jones experiencing a significant 4% drop. The market was largely affected by President Trump's announcement of new tariffs against U.S. trading partners, which shook investor confidence and triggered a sharp sell-off, entering correction territory. During this period, the Nasdaq Composite dipped into bear market territory, further compounding pressure across various sectors, including Estée Lauder. As general market conditions were highly volatile, the company's total shareholder returns reflected broader economic uncertainties and market reactions to geopolitical tensions.

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Over the last year, Estée Lauder Companies experienced a significant total shareholder return decline of 58.77%. Relative to the US Personal Products industry, which declined 34.1%, and the broader US market, which saw a gain of 3.3%, Estée Lauder's performance lagged considerably. Key factors influencing this downturn include a reported impairment of goodwill and intangible assets amounting to US$861 million in February, signaling potential overvaluation of acquired assets. Additionally, a new senior unsecured credit agreement of US$2.5 billion was established in June, which could point to an increased debt burden.

The Q2 earnings report in February highlighted a sales decrease to US$4 billion from US$4.28 billion year-over-year, with a net loss of US$590 million compared to a net income of US$313 million in the prior year. This downturn was compounded by a forecasted double-digit decline in the global travel retail sector, primarily affecting net sales and profit margins. The partnership with Serpin Pharma announced in February did not immediately impact financial performance but highlights ongoing efforts to innovate in skin care.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NYSE:EL.

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