Shares surged as much as 20% to $160.07 in premarket trading after the company handily beat second-quarter profit estimates. Still, the stock remains well below its January 2022 record high of $374.20.

The MAC lipstick maker in an attempt to counter a hit to margins due to weakening demand for its products, mainly in China and Asia travel retail, had initiated a profit recovery plan last quarter.

Estee expects to drive incremental operating profit between $1.1 billion and $1.4 billion, up from the $800 million to $1 billion it estimated earlier.

Bernstein analyst Callum Elliott said the restructuring "appears to acknowledge the need for change."

The restructuring will start in the third quarter of fiscal 2024, the company said, and expects to record between $500 million and $700 million in charges before taxes.

Estee had about 62,000 employees worldwide, as of June 2023. Of these, 71% were full-time, 16% temporary and 13% part-time employees.

The company also cut its annual profit forecast as recovery has been much slower, with consumption taking a beating in China as the world's second-largest economy struggles with a higher youth unemployment rate and a property crisis.

Organic net sales in the Americas fell 1% in the reported quarter compared to the 6% growth in the prior quarter.

Estee, like other larger luxury companies, is also facing a glut of smaller competitors in the beauty space taking away share.

The company now expects full-year 2024 adjusted profit per share between $2.08 and $2.23, compared with the prior forecast of $2.17 to $2.42.

Estee's net sales fell 7.4% to $4.28 billion in the second quarter, compared to analysts' estimate of $4.19 billion, according to LSEG data.

Excluding items, Estee earned 88 cents per share, surpassing expectations of 55 cents.