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Americans Outspending Chinese Shoppers: Retailers in China Face Challenges


The spending habits of Americans continue to soar, but Chinese shoppers are not following suit. This trend is proving to be a challenge for retailers with large operations in the world’s second-largest economy.

Estée Lauder, a renowned beauty brand (ticker: EL), recently revised its fiscal-year outlook lower. Similarly, Canada Goose Holdings (GOOS) witnessed its revenue falling short of expectations in the latest quarter. Additionally, Yum China Holdings (ticker: YUMC) missed third-quarter revenue and sales estimates. All three companies reported soft demand among Chinese consumers.

Fabrizio Freda, CEO of Estée Lauder, expressed concern, stating, “We are lowering our fiscal 2024 outlook given incremental external headwinds, namely from the slower growth in overall prestige beauty in Asia travel retail and in mainland China.”

Investors had high hopes that Chinese consumers would make a robust comeback, much like their American counterparts did after emerging from pandemic-related lockdowns. However, China’s economic recovery has been sluggish and disappointing thus far.

Although there are signs of economic stabilization, consumer spending remains below pre-pandemic levels. In 2019, retail sales in China experienced an 8% year-over-year increase. However, in 2022, sales witnessed a decrease of 0.2% compared to the previous year. From January to September of this year, sales have only seen a modest increase of 6.8%.

Andy Yeung, Yum China’s chief financial officer, noted during an investor call that the company observed a decline in demand during September and October. He also mentioned that consumers have become more conscious of value when making purchasing decisions.

Yum China and Estée Lauder Earnings Reports Spark Concern Ahead of Singles Day


Yum China and Estée Lauder recently issued warnings, sending ripples of concern through the investment community just weeks before Singles Day. This unofficial shopping extravaganza has emerged as the world’s largest 24-hour online sale, surpassing the likes of Black Friday and Cyber Monday combined, as reported by Coresight Research.

Market Reaction

Investors and analysts are closely monitoring the long-term implications of these latest earnings reports, particularly for companies heavily reliant on the Chinese consumer market. Bernstein analyst Callum Elliott raises a pertinent question in his client note: “Is this the final cut?” This echoes previous quarters and underscores the uncertainty surrounding Estée Lauder’s guidance cut.

  • Estée Lauder stock plummeted 18% during early morning trading, approaching its lowest close since August 2017. This decline may potentially mark its largest one-day percentage decrease ever, based on Dow Jones Market data.
  • Yum China’s stock experienced a sharp decline of 18%.
  • Canada Goose also faced a significant drop of 9%.
  • Other U.S. companies with significant exposure to the Chinese market followed suit, with Starbucks stock down 1.3%, Nike falling by 2%, and Las Vegas Sands dipping 1.7%.

Overall Market Performance

In contrast, the S&P 500 showed resilience, recording a 0.5% increase amidst the market uncertainty.


The warnings issued by Yum China and Estée Lauder ahead of Singles Day have instigated concerns among investors and analysts alike. These developments have prompted apprehension regarding the long-term impact on companies operating within the Chinese consumer market.

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