Estee Lauder’s (EL) stock tumbled on Wednesday as the company lowered its expectations for sales in 2023. 

Adjusted earnings per share for the company’s fiscal third quarter fell 75% from the same period last year while net sales lagged 12%. Slower-than-expected Asia travel recovery weighed on growth, according to Estee Lauder management.

“The actual impacts to our business in Asia travel retail and China, to a lesser extent, have been far greater than we anticipated,” Estee Lauder CFO Tracey Travis said on the company’s earnings call. Travel retail refers to duty-free sales at places like airports, airlines and cruises, to name a few.

The retailer now expects fiscal year 2023 sales to decline in a range of 10% to 12%. The company had previously guided for a decline of 5% to 7%.

Estee Lauder shares sank a record 21% at the market open on Wednesday and pared losses to end the day down 17%.

Global travel retail organic sales declined 45% in the quarter, according to Estee Lauder. The retailer attributed its net sales declines specifically to Asia travel retail in Hainan and Korea.

Broadly, the skincare category dropped 17% from a year ago, which Estee Lauder also attributed to lingering COVID-19 related shutdowns.

COVID-19 related policy in China has been far stricter than Western countries like the U.S. As recently as March, Chinese cities have utilized lockdowns to limit the spread of diseases, according to Bloomberg. On April 29, China removed PCR test requirements for inbound traverlers.

“Obviously in a moment of the pandemic, travel retail has been more difficult to predict,” Estee Lauder CEO Fabizio Freda said on Wednesday’s call. He noted, though, that there were positives to the channel long-term, such as brand-building and trial-building.

The sales declines contrast the results of others operating in Asia and the makeup industry as a whole. On April 12, LVMH (MC.PA) boasted a 17% revenue jump from the prior year amid a “significant rebound” in China. In March, Ulta Beauty (ULTA) reported a 15.6% comparable sales increase as beauty products have largely been viewed as resilient amid the current macroeconomic uncertainty.

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With that backdrop, the slowdown at Estee Lauder in the third quarter was worse than some analysts had feared.

But Wall Street analysts remain bullish on the stock. There are 24 Buys, 9 Holds, and 1 Sell on Estee Lauder, combining for an average price target of $289, according to Bloomberg Consensus Data.

“It’s been difficult to predict the timing of all of this recovery,” Freda said. “But we do know that recovery is happening. So we don’t believe there is an issue at all with prestige beauty.”

Josh is a reporter for Yahoo Finance.

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