Estée Lauder is planning to lay off 1,500 to 2,000 employees and close 10 to 15 percent of its 1,500 freestanding stores globally, the makeup company announced Thursday.
The decision is part of the retailer's "Post-COVID Business Acceleration Program" aimed at helping business recovery after the pandemic hurt its in-person business, though its online business kept sales steady.
The layoffs and store closures are expected to save $300 million to $400 million each year before taxes, the company said.
"Fiscal 2020 was a year without parallel, as we delivered record sales and exceptionally strong adjusted EPS growth in our first half and navigated with agility through an unprecedented pandemic in our second half," Estée Lauder President Fabrizio Freda said in a statement.
He added that the company's "multiple engines of growth strategy proved highly effective," and the "Estée Lauder brand grew double-digits for the third consecutive year."
Estée saw a 4 percent decrease in net sales for its fiscal year ended June 30, according to a press release.
During the three months ending June 30, the New York-based company said it had a loss of $1.28 per share. Losses, adjusted for asset impairment costs and non-recurring costs, were 53 cents per share.
The results did not meet Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for a loss of 19 cents per share.
The beauty products company posted revenue of $2.43 billion in the period, which also missed Street forecasts. Eight analysts surveyed by Zacks expected $2.46 billion.
For the year, the company reported a profit of $684 million, or $1.86 per share. Revenue was reported as $14.29 billion.
"In this new fiscal year, we remain focused on the safety and well-being of our employees and consumers. Our sense of urgency to act on our recently announced racial equity commitments is strong. We enter fiscal 2021 with cautious optimism. ... We expect sales trends to improve sequentially each quarter," Freda said.
The Associated Press contributed to this report.