The Estée Lauder Companies Inc. reported net sales of $1.86 billion in the third quarter 2010, a 10% increase compared with $1.70 billion reported in the prior-year period. Excluding the impact of foreign currency translation, net sales increased 5% from a year ago. The company reported net earnings for the quarter of $57.5 million, compared with $27.2 million last year.
"Our performance in the past quarter continued to be of high quality, reflecting strong top-line growth, particularly from our international businesses, a streamlined cost structure and improved inventory management," said Fabrizio Freda, president and CEO, The Estée Lauder Companies. "Our success is driven by a well-executed strategy and we are very pleased with our accomplishments over the past nine months. The progress we've made illustrates our ability to move the company forward and create value."
Skin care remains a strategic priority for the company, which gained share in the category during the quarter in certain countries in stores where its products are sold. Across each region, the Estée Lauder brand had strong sales from the recent launch of Advanced Night Repair Synchronized Recovery Complex, the introduction of Hydrationist Maximum Moisture Creme and Lotion, as well as the Re-Nutriv line of products. Higher sales were also generated from Clinique's new Even Better Clinical Dark Spot Corrector and Youth Surge Night Age Decelerating Night Moisturizer.
In local currency and on a reported basis, makeup net sales increased strong double digits in Asia/Pacific. Local currency sales in Europe, the Middle East/Africa were lower, while reported sales increased, reflecting favorable foreign currency translation. Sales in the Americas declined, primarily reflecting lower sales of Prescriptives products due to the exit from the global wholesale distribution of the brand. The majority of the sales increase came from the makeup artist brands, driven primarily by their international businesses.
The double-digit net sales increase in fragrance was largely due to the international launch of Pure DKNY, the recent launch of DKNY Delicious Candy Apples and the domestic introduction of Coach Signature. Higher sales of DKNY Be Delicious Fresh Blossom and increased sales of certain designer fragrances through self-select outlets also contributed to the category's growth. The company's priority in this category was profitability improvement. Fragrance operating loss improved, primarily reflecting increased net sales from higher-margin products, partially offset by an increase in support spending behind specific launches.
Increased net sales of certain styling and hair color products and expanded international distribution at Aveda, were partially offset by a soft salon retail environment in North America. Hair care operating results increased over 100%, reflecting the higher net sales, savings generated from cost containment initiatives and the closing of certain underperforming retail stores in prior periods.
To read the entire report, including a break down of regional performance, visit The Estée Lauder Companies Web site.
