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Estée Lauder Reports Net Sales of $2.74 Billion
Posted: February 3, 2012
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Net sales growth in the Americas was primarily attributable to a strong holiday retail environment in prestige beauty channels in the United States, which benefited from winning new product offerings from the company. The improvement also reflects strong growth from the company’s heritage and makeup artist brands, as well as increased sales of higher-end prestige skin care products. Further, growth reflects prestige beauty outpacing mass, due in part to the company’s strong innovations and personalized service. The higher sales also reflect strong double-digit gains in Latin America, which benefited from growth in emerging markets, such as Brazil, and sales of the company’s products online increased double digits while its sales to department stores grew high-single digits.
For Europe, the Middle East and Africa region, in constant currency, net sales increased in most countries in the region and in each product category, except fragrance. Also, its travel retail business continued to generate strong double-digit net sales growth in the quarter, resulting from successful product launches, higher global airline passenger traffic and a stronger conversion of travelers into purchasers. In constant currency, double-digit net sales growth was recorded in a number of areas, led by the Middle East, Italy and Turkey. These increases reflect strong demand for the company’s products, even in relatively soft retail environments. These increases were partially offset by lower net sales in a few countries, led by Russia, due to destocking by a retailer.
The company generated strong double-digit local currency sales growth in the Asia/Pacific region, with increases in all countries except Japan and Singapore. The strongest gains were generated in China, Korea, Hong Kong, Australia and Thailand, primarily reflecting strong sales of skin care and makeup products.Net sales growth in Korea, Australia, Thailand and New Zealand included approximately $25 million related to increased orders from certain of the company’s retailers.
For the six months ended December 31, 2011, the company reported net sales of $5.21 billion, a 14% increase from $4.58 billion in the comparable prior-year period. Excluding the impact of foreign currency translation, net sales increased 12%. On a reported basis, as well as in constant currency, net sales grew in each of the company’s geographic regions and product categories. The company also reported net earnings of $675.3 million for the six months, a 26% increase from the $535 million in the same period last year.
During fiscal 2012, the Estée Lauder Companies will continue to execute its winning strategy and expects continued strong results. The company expects to continue to grow faster than the global prestige beauty industry. At this time, the company’s outlook assumes some softening in global prestige beauty, particularly in certain European countries, Japan and Australia, due to recent economic uncertainty and volatility in the financial markets. The outlook also assumes a slowing growth trend of the Chinese economy. The company believes it has been able to offset the impact of these events as a result of its strategy to mitigate weaknesses in certain areas with strengths in others, demonstrating its ability to grow ahead of prestige beauty in both soft and strong environments.