By Dean Seal and Natasha Khan

Estée Lauder said it expects to cut between 5,800 and 7,000 positions as part of its two-year restructuring plan, as it swung to a fiscal second-quarter loss on lower sales.

Shares tumbled in early Tuesday trading, and were recently down 5%, at $78.52.

The cosmetics giant behind MAC and Jo Malone said Tuesday that it is expanding the restructuring effort new Chief Executive Stéphane de La Faverie, a longtime executive who took over earlier this year, and now forecasts $1.2 billion to $1.6 billion in pretax charges tied to employee-related costs, contract terminations, asset write-offs and other expenses.

In December, Estée Lauder pegged the restructuring plan's total costs at $500 million to $700 million pretax. The company had initially expected to cut 1,800 to 3,000 jobs, or about 3% to 5% of its 62,000-person workforce as of last June.

The overhaul is expected to yield $800 million to $1 billion, before taxes, in annual benefits, which should help restore operating margins and be reinvested in consumer-facing areas, the company said.

Estée Lauder launched the restructuring in November 2023 with a goal of expanding margins in 2025 and 2026 by focusing on profitability, lower costs and accelerating sales growth.

The job cuts figure was delivered on Tuesday alongside the New York-based company's latest quarterly report, which showed it swinging to a loss in the last three months of 2024 on a 6% drop in revenue. Estée Lauder has been struggling with weak demand, especially in Asia, for its products among shoppers in China and Korea.

The New York-based company said it expects sales to fall 10% to 12% for the fiscal third quarter, which ends March 31. Earnings for the quarter are expected to hit 4 cents to 17 cents a share, or 24 cents to 34 cents a share when adjusted for one-time items and foreign currency translation. Analysts had been projecting 63 cents a share, according to FactSet.

Estée Lauder posted a quarterly loss of $590 million, or $1.64 a share, for the quarter ended Dec. 31, from a profit of $313 million, or 87 cents a share, in the same quarter a year ago.

Stripping out one-time items, adjusted earnings were 62 cents a share, a penny below the 63 cents a share analysts polled by FactSet had been expecting.

Revenue fell 6% to $4 billion, above analyst forecasts for $3.98 billion, according to FactSet.

Sales were down 12% in its skin care business, its largest by revenue, and about 1% for its makeup division, its second largest top line contributor, due to challenges in the retail market in Asia.

Hair care sales were down 8% from softness in the company's salon channel and the timing of shipments. Fragrance sales were up 1%, driven by the company's luxury brands.

On the bottom line, the company took $861 million in goodwill and other asset impairments, and another $181 million in charges associated with its restructuring.

Write to Dean Seal at dean.seal@wsj.com and Natasha Khan at natasha.khan@wsj.com

(END) Dow Jones Newswires

February 04, 2025 09:08 ET (14:08 GMT)

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