{"id":5630,"date":"2023-11-01T17:59:16","date_gmt":"2023-11-01T17:59:16","guid":{"rendered":"https:\/\/connectwithfund.com\/markets\/estee-lauder-yum-china-issue-warning-on-chinese-consumers-the-stocks-fall\/"},"modified":"2023-11-01T17:59:17","modified_gmt":"2023-11-01T17:59:17","slug":"estee-lauder-yum-china-issue-warning-on-chinese-consumers-the-stocks-fall","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=5630","title":{"rendered":"Estee Lauder, Yum China Issue Warning on Chinese Consumers. The Stocks Fall."},"content":{"rendered":"
\n
<\/p>\n

<\/p>\n

<\/p>\n<\/figure><\/div>\n

Americans keep spending more and more, but it seems like nothing can light a fire under Chinese shoppers. <\/p>\n

That\u2019s weighing on retailers that have sizable operations in the world\u2019s second-largest economy. <\/p>\n

\n Est\u00e9e Lauder
\n (ticker: EL) cut its fiscal-year outlook Wednesday;
\n Canada Goose Holdings
\n \u2018 (GOOS) revenue fell short of expectations in its latest quarter; and
\n Yum China Holdings
\n (ticker: YUMC) missed third-quarter revenue and sales estimates. All said, demand among Chinese consumers was still soft. <\/p>\n

\n

\u201cWe are lowering our fiscal 2024 outlook given incremental external headwinds, namely from the slower growth in overall prestige beauty in\u00a0Asia\u00a0travel retail and in mainland\u00a0China,\u201d said
\n Est\u00e9e Lauder
\n CEO Fabrizio Freda in a release Wednesday.<\/p>\n

Many investors had hoped that China\u2019s consumers would have shifted into overdrive by now, like U.S. shoppers did after exiting pandemic-era lockdowns. So far, however, China\u2019s economic recovery has been sluggish and underwhelming. <\/p>\n

While there are some signs the economy is stabilizing, consumer spending is still below prepandemic levels. In 2019, retail sales in China rose by 8% year-over-year. In 2022, sales were down 0.2% compared with the previous year. From January to September of this year, sales are up 6.8%. <\/p>\n

Andy Yeung,
\n Yum China
\n \u2018s chief financial officer, said on a call with investors Tuesday that the company had seen softening demand in September and October. <\/p>\n

\u201cConsumers have become more value conscious,\u201d he added. <\/p>\n

Yum China and Est\u00e9e Lauder\u2019s warnings are especially worrisome, as they were issued less than two weeks away from Singles Day. The unofficial shopping holiday has rapidly become the world\u2019s biggest 24-hour online sale\u2014bigger than Black Friday and Cyber Monday combined, according to Coresight Research. <\/p>\n

And indeed, shares of companies with large exposure to Chinese consumers were taking a hit Wednesday as investors and analysts fretted over the long-run implications of the latest earnings reports. <\/p>\n

\u201cThe big question, like last quarter, and the one before it, will be: \u2018is this the final cut?,\u2019\u201d Bernstein analyst Callum Elliott wrote in a note to clients, referring to Est\u00e9e Lauder\u2019s guidance cut. <\/p>\n

Est\u00e9e Lauder stock dived 18% in early morning trading, on track for its lowest close since August 2017, and possibly its largest one-day percent decrease on record, according to Dow Jones Market data. <\/p>\n

Yum China\u2019s stock tumbled 18%, and Canada Goose slid 9%. Other U.S. companies with large exposure to Chinese consumers were also trading lower.
\n Starbucks
\n stock (SBUX) was down 1.3%,
\n Nike
\n (NKE) fell 2%, and
\n Las Vegas Sands
\n (LVS) dipped 1.7%. <\/p>\n

The
\n S&P 500
\n was up 0.5%. <\/p>\n

Write to Sabrina Escobar at sabrina.escobar@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Americans keep spending more and more, but it seems like nothing can light a fire under Chinese shoppers. That\u2019s weighing on retailers that have sizable operations in the world\u2019s second-largest economy. Est\u00e9e Lauder (ticker: EL) cut its fiscal-year outlook Wednesday; Canada Goose Holdings \u2018 (GOOS) revenue fell short of expectations in its latest quarter; and Yum China Holdings (ticker: YUMC) missed third-quarter revenue and sales estimates. All said, demand among Chinese consumers was still soft. \u201cWe are lowering our fiscal 2024 outlook given incremental external headwinds, namely from the slower growth in overall prestige beauty in\u00a0Asia\u00a0travel retail and in mainland\u00a0China,\u201d<\/p>\n","protected":false},"author":1,"featured_media":5631,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"class_list":["post-5630","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets"],"yoast_head":"\nEstee Lauder, Yum China Issue Warning on Chinese Consumers. The Stocks Fall. | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"Americans keep spending more and more, but it seems like nothing can light a fire under Chinese shoppers. 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