Estée Lauder lowered its annual organic sales estimate on persistent softness in Mainland China’s prestige beauty space, even as a demand rebound in the US and Asia-Pacific markets drove a profit forecast raise.

Shares of the New York-based company dropped 5 percent in pre-market trading on Wednesday.

Estée also beat Wall Street targets for third-quarter results, hinting at a recovery in demand for beauty and cosmetic products in the US after a long bout of inflation had pressured sales of luxury items in the world’s biggest economy.

A pick-up in China demand after several quarters of weakness also underscored customer willingness to splurge on “affordable luxuries” such as fragrances and make-up products.

“Estée Lauder’s management might have taken the view it is better to be cautious now and over-deliver, than continue with high expectations and fail to sell enough products,” said Dan Coatsworth, investment analyst at AJ Bell.

The company expects annual organic sales to fall 1 percent to 2 percent, compared with its previous forecast for a 1 percent decrease to a 1 percent increase.

Third-quarter organic net sales in the Americas grew 1 percent, with a 3 percent rise in the Asia Pacific region.

Last month, European rival L’Oréal also beat sales expectations and eased concerns about waning demand in the US and China - the two biggest beauty markets.

“The sector has held better than I expected and the question really around luxury and personal luxury goods is whether 2024 will be a hard or soft landing ... so far it speaks to the narrative of a soft landing,” said Javier Gonzalez Lastra, luxury-focused portfolio manager at Tema ETFs.

Estée now expects full-year 2024 adjusted profit per share between $2.14 and $2.24, compared with a prior forecast of $2.08 to $2.23.

Net sales rose 5 percent to $3.94 billion, compared with LSEG estimates of $3.91 billion. Adjusted profit of 97 cents per share surpassed expectations of 49 cents.

By Ananya Mariam Rajesh; Editing by Devika Syamnath

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Deciem’s other skincare brand, NIOD, also sells serums with names straight out of a lab, but with more complex formulations and higher-spec packaging. A decade into the science-backed skincare craze, the company believes its consumers are ready to move upmarket.

Mulberry, the luxury British brand best known for its leather handbags that can cost more than £1,600 ($1,998) each, has reported a 4 percent decline in annual sales, becoming the latest high-end company to warn of a slowdown in spending among the richest shoppers.

In a trading update, Thierry Andretta, the chief executive, said: “While we achieved positive revenue growth in the first half, Mulberry has not been immune to the broader downturn in luxury spending experienced in recent months, particularly in the UK and Asia. This decline was partially offset by positive trading in the US, where we have benefited from increased brand awareness.

“Looking ahead, the trading environment in the UK and China remains challenging and we do not expect this to change in the short-term. We are therefore managing the business prudently, focusing on executing our strategy and vision to become a global sustainable luxury brand,” Andretta added.

The company, which was founded in 1971 by the entrepreneur Roger Saul and his mother, Joan, said international sales had increased by 7.2 percent but UK retail sales had dropped by 3.2 percent in the year to the end of March.

The share price, which has fallen by almost 60 percent so far this year, declined by a further 4.5 percent in early trading on Wednesday.

In January, Mulberry blamed the slowdown in demand for luxury spending and a lack of VAT-free shopping for a 9 percent decline in sales over its “golden quarter,” which included the Christmas shopping period.

“In the UK, we continue to believe the lack of VAT-free shopping is impacting the retail landscape, as well as the hospitality, leisure and tourism sectors,” Andretta said at the time. “Looking ahead, we are continuing to execute our plans and remain confident that our investments will underpin future sustainable growth.

“In the run-up to Christmas, the macroeconomic environment continued to impact consumer spending in the luxury retail sector, which Mulberry was not immune from.”

By Rupert Neate Wealth

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NEW YORK — Every night, millions of people tape their mouths shut before dozing off, hoping they’ve discovered the secret to deeper, uninterrupted sleep – and potentially a more defined jawline.

As bizarre as this may sound – and despite scepticism from many scientists who study sleep – #mouthtape has over 200 million views on TikTok. The wellness influencer and podcaster Lauren Bosstick has launched a $38-a-pack, lip-shaped pink mouth tape on her website, The Skinny Confidential. The item sold out within 48 hours, and three more restocks sold out within one hour, according to the brand. Now with a 100,000-person waiting list for the next drop, Bosstick said the product alone is projected to generate “eight figures” in revenue this year.

Mouth tape is just one product in the booming sleep economy, which includes everything from skin serums and supplements and temperature-controlled mattresses. It’s all part of a mindset shift away from the hustle culture of the 2010s when getting as little sleep as possible was a badge of honour. Today, health is considered a status symbol and being well-rested is a priority.

“I think today being sleep deprived is the new smoking,” said Matteo Franceschetti, chief executive officer of the temperature-controlled mattress start-up Eight Sleep.

Data That Will Keep You Up at Night

The Center for Disease Control and Prevention estimates one-third of adult Americans, roughly 70 million people, get an insufficient amount of sleep. And a bad night’s sleep can lead to more than grogginess, dull skin and dark under-eye circles. Chronic poor sleep can lead to increased signs of skin ageing and life-threatening diseases, including Type-2 diabetes, heart disease, depression and Alzheimer’s.

Scientists and physicians have formally observed sleep patterns for nearly a century, but it was the advent of wearables like the FitBit, which hit the market in 2009, that allowed for anyone to keep tabs on their circadian rhythms from the comfort of their own home.

Tim Rosa, former chief marketing officer at FitBit and chief executive of Somnee, which sells a headband that uses “personalised closed-loop neurostimulation” to improve sleep, said the FitBit’s sleep tracker was one of its most popular features from the beginning.

In the 2010s, the Apple Watch, Whoop and the Oura ring followed, and made sleep performance a key part of their pitch too.

“I think this is why the market is so big, because there is this generation of people who want to be optimised,” said Jeff Byers, CEO of Momentous, an athletic supplements and nutrition company. The brand’s “sleep bundle” of inositol, magnesium, magnesium threonate and L-theanine makes up about 25 percent of sales.

The pandemic supercharged interest in all things health, fitness and wellness, sleep included, Byers said. Soon, health podcasters like Stanford neuroscientist Dr. Andrew Huberman, who has partnered with Momentous, and sleep scientists like Matthew Walker — whose “Sleep Is Your Superpower” Ted Talk has 12 million views — became wildly popular for translating the complexity of sleep science into digestible and actionable information.

Want Better Sleep? There’s a Product for That

The solution for sleep deprivation is deceptively straightforward: get more sleep. Robert McNight, professor of psychology and neuroscience at the University of California at Berkeley, and chief medical officer at Somnee, said six to eight hours does the trick, encompassing three or four cycles of light, deep and REM sleep.

But that hasn’t stopped brands from coming up with ways to commercialise the practice.

For decades, prescription drugs like Ambien and over-the-counter melatonin have been the most common sleep aids. But with little regulatory oversight, new supplement formulations have been flooding the market, from Momentous’s performance-driven products to Moon Juice’s adaptogen-infused magnesium powders and Barbara Strum’s Good Night ingestibles.

Beauty sleep also extends to skincare and mattresses. Since 2018, however, Aurelian Lis, the CEO of premium skincare brand Dermalogica began noticing how skincare started to converge with wellness, prompting the launch of the line’s Sound Sleep Skin Cocoon night gel cream, which claims to help the skin recover overnight and reduce tossing and turning with motion-activated essential oils that promote relaxation. It’s now one of the Unilever-owned brand’s biggest hits, representing one-third of its overall business.

Although not the first to enter the mattress market, Eight Sleep’s smart toppers, which it calls “pods” dynamically adjust to an individual’s body temperature at rest and have been popular amongst high-achieving entrepreneurs like Jeff Bezos and Mark Zuckerberg and athletes like the Crossfit champion Justin Medeiros and racing star Lewis Hamilton. The company is now valued at $500 million.

But wearables in the venture capital favourite “sleep tech” and “digital therapeutics” industry are also evolving from providers of sleep -racking data to providers of actual solutions. On top of Somnee, there’s now the Muse headband designed to be a “real-time meditation coach” and the AI-powered Earable’s Frenz Brainband that stimulates the brain with audio therapy; it just won the Consumer Electronics Show 2024 Innovation Award.

Results May Vary

Many brands signal their efficacy with studies, or endorsements from doctors. But a lack of regulation and an overwhelming array of options making a broad variety of promises can make it difficult for consumers to separate the gimmicks from the genuine solutions.

A healthy diet, working out and limiting screen time before bed are all effective to having a good night sleep, McNight said. Even though he is affiliated with Somnee, he believes that for individuals without underlying medical conditions or chronic sleep disorders, the key to achieving a restful night’s sleep may not require purchasing any tools or devices. “Read a book for about ten minutes [at bedtime],” he said. “You’re setting up a slow rhythm, which is the key feature of your second stage of sleep.”

Still, entrepreneurs won’t stop launching new products in the booming sleep economy.

Dermalogica will be launching another sleep-centric product in August, which it predicts to generate “double-digit millions” in sales in its first year. Franceschetti expects that in the next three to five years, it “will become a preventative health platform.”

However, Rosa cautions that shoppers should proceed with caution. “In America, anytime there’s a business opportunity, you’re going to have a lot of companies chasing it. But a lot of them are going to fail because they don’t deliver what consumers ultimately want.”

Space NK may be up for sale.

Manzanita Capital, the family office that has owned the retailer for more than 20 years, has hired the investment bank Raymond James to handle its sale, Sky News reported earlier this week. Space NK declined to comment on the report.

Manzanita has yet to make a final decision about whether a sale will go ahead, but the business could be worth between $374 million and $500 million, according to Sky News.

Space NK was founded in 1993 by Nicky Kinnaird and now spans 76 stores throughout the UK that sell premium beauty products, as well as indie brands. The retailer is regarded as a tastemaker, and was the first to sell brands such as Nars in the British market. It currently stocks buzzy brands such as Rare Beauty, Summer Fridays and Olaplex.

In 2018, Manzanita, which also owns the fragrance brand Diptyque, explored a sale, but chose not to proceed, per the report. It has had a number of successful exits; most notably in 2022, Puig snapped up a majority stake in its fragrance brand Byredo for a reported $1 billion.

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