The Estée Lauder Companies Q1 2023 Sales Decline 11%

The Estée Lauder Companies has announced its first quarter 2023 results, which showed net sales were $3.93 billion, a decline of 11% from $4.39 billion in the previous year.

The Company reported net earnings of $489 million, as compared to $692 million in the previous year.

Skin Care

Net sales were $2,104 million, as compared to $2,449 million in the previous year.

Growth from La Mer reflected increases in hero products, including the upgrade to The Treatment Lotion and Crème de la Mer, and targeted expanded consumer reach.    

Bobbi Brown net sales grew double digits across every region, driven by increases in hero products, including Soothing Cleansing Oil and Vitamin Enriched Face Base, and targeted expanded consumer reach.     

Makeup

Net sales were $1,052 million, as compared to $1,174 million in the previous year.

Net sales growth from M·A·C was offset by declines from Estée Lauder and Tom Ford Beauty.    

M·A·C high single-digit net sales growth was driven by hero products, such as Studio Fix foundation and Matte Lipstick, the recent launches of M·A·CStack mascara and Powder Kiss Velvet Blur Slim Stick lipstick, and the recovery in brick-and-mortar, as the brand’s high-touch services drove conversion    

Fragrance

Net sales were $607 million, as compared to $609 million in the previous year.

Tom Ford Beauty net sales grew strong double digits, powered by launches, such as Noir Extreme Parfum and Ebene Fume, as well as organic growth in existing hero franchises like Oud Wood and Ombre Leather.    

Jo Malone London net sales grew high single digits primarily driven by strength in colognes, particularly in hero franchises, as well as strength in home and bath & body.

Net sales from Le Labo rose strong double digits, primarily reflecting growth in brickand-mortar, and targeted expanded consumer reach.    

Hair Care

Net sales were $158 million, as compared to $148 million in the previous year.

Aveda’s net sales growth reflected strength in Europe, the Middle East and Africa, the launch of the brand in mainland China, the continued success of its hero franchises, including Botanical Repair, and the launch of the Color Control franchise line of products    

Q2 Outlook

Reported net sales are forecasted to decrease between 19% and 17%, as compared to the previous year.

Fabrizio Freda, president and CEO said:

For the first quarter, we delivered organic sales in line with our outlook and adjusted EPS ahead of it even as the transitory external pressures of COVID-19 restrictions in China, high inflation globally, and a strong U.S. dollar intensified. Our multiple engines of growth strategy empowered us to seize prevailing growth opportunities amid the complexity. Fragrance and hair care each rose double digits organically, and makeup’s renaissance continued to realize its promise in markets reopening. Skin care was the most challenged by COVID-19 restrictions in China, which significantly impacted the category in travel retail. All told, 13 brands grew  organically, as M·A·C excelled in makeup, La Mer in luxury skin care, Jo Malone London in Fragrance, and Aveda in hair care. Encouragingly, we realized strong double-digit gains in many large developed and emerging markets around the world.