Bare Escentuals’ shares fell as much as 46 percent on Friday to a record low on the news that expectations for sales and earnings growth had been cut because of the challenging economic climate.
The previous estimate for sales and profit growth was in the 15-20 percent range but the company now expects the figure to be closer to 10 percent.
Sales growth slow down
In the third quarter, Bare Escentuals lost its double-digit gleam with sales increasing just 3 percent to $130.2m.
Net income figures were rosier advancing by a brisk 12 percent to $22.9m for the three months ending September 28.
Nevertheless Bare Escentuals CEO Leslie Blodgett was critical of the financial performance in the quarter.
She said: “We are not satisfied with our results which in no way reflect the strength and potential of our brand.”
To put the company back on track, marketing spend will be ramped up to 6 to 7 percent of sales in an attempted to attract new followers to the brand.
Jobs cuts announced
A total of 10 percent of the corporate workforce is also being axed to make the company leaner and more efficient.
The job cuts are designed to relieve the pressure on margins exerted by higher promotional spending and the possibility of lower sales.
Bare Escentuals is the latest cosmetics company to report disappointing results in the past week with L’Oreal and Avon both falling short of expectations.
