Estee Lauder Companies Inc. (NYSE:EL) saw its stock tumble over 7% in pre-market today after issuing a disappointing third-quarter outlook, overshadowing better-than-expected earnings for Q2 of fiscal 2025.

The cosmetics giant posted earnings per share (EPS) of $0.62 for Q2, far exceeding analyst projections of $0.31. Revenue came in at $4 billion, slightly ahead of the anticipated $3.98 billion.

By region, North American sales dipped 1.5% to $1.22 billion, in line with expectations. EMEA revenue dropped 6% to $1.49 billion, while Asia Pacific sales declined 11% to $1.29 billion, narrowly topping the $1.27 billion consensus estimate.

Despite the solid Q2 performance, guidance for Q3 fell well short of expectations. The company projected EPS between $0.24 and $0.34, drastically below the $0.64 forecasted by analysts.

CEO Stéphane de La Faverie acknowledged the disappointing outlook, attributing the weakness primarily to sluggish retail sales in Asia's travel sector, which deteriorated further in Q2, particularly in Korea.

Looking ahead, the company expects the difficult retail conditions in Asia travel retail to persist, significantly weighing on organic net sales, despite the stabilization of in-trade inventory levels achieved in the first half of fiscal 2025.