Estee Lauder’s forecast disappoints. Stocks are falling.

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Estee Lauder

shares were lower in premarket trading Thursday after the beauty company said it expected fiscal first-quarter earnings below Wall Street estimates.

Estee Lauder

(ticker: EL ) said it expects first-quarter earnings of between $1.22 and $1.32 per share, well below analysts’ estimates of $1.84. The company also expects net sales to decline 10% to 8% from the year-ago period.

Estee Lauder attributed the forecasts to impacts related to Russia’s invasion of Ukraine, as well as foreign currency transactions, particularly in international markets where travel is popular.

For the fiscal fourth quarter, Estee Lauder posted adjusted earnings of 42 cents per share on revenue of $3.56 billion. Analysts polled by FactSet had expected the company to post earnings of 33 cents a share on revenue of $3.42 billion.

“Our multiple growth strategy drivers have proven invaluable amid the pandemic and macro complexity,” CEO Fabrizio Freda said in the company’s earnings release.

Shares of Estee Lauder fell 1.4% in premarket trading Thursday to $272.60. As of early trading on Thursday, the stock has fallen 25% this year.

Ahead of the earnings release, RBC Capital Markets analyst Nick Mody wrote in a research note that Estee Lauder was “the best-run company in our coverage” and that he approached quarterly forecasts “with caution given the continued volatility of Covid-19 in China.”

Modi expected the results to be driven by America and Europe “as the cosmetic renaissance promised by Estee Lauder appears to have arrived”. Quoting Modi

Ulta Beauty’s

(ULTA) strong results in Maywith customers continuing to show interest in skincare and returning to using makeup with the lifting of Covid lockdowns.

“The return of social use cases boosted the use of cosmetics as restrictions in the US and Western Europe were lifted,” Modi wrote.

Estee Lauder was a Barron’s stock selection in July.

Write to Angela Palumbo at angela.palumbo@dowjones.com