The Estée Lauder Companies Inc. has reported Q1 fiscal 2024 net sales of $3.52 billion, a decline of 10% from $3.93 billion in the prior year. Organic net sales declined 11% due to weakness in the Asia travel and mainland China markets.
That said, the company witnessed organic net sales growth in the United States, Hong Kong SAR and Japan, almost all European markets (particularly the United Kingdom and Germany), and the Middle East and Africa.
Organic net sales in fragrance and makeup grew 5% and 1%, respectively, while skin care declined 21%. Hair care results dropped 7%, led by declines in North America.
Fabrizio Freda, president and CEO, said, “In the context of a quarter which we anticipated to be challenging, we delivered our organic sales outlook and exceeded expectations for profitability. Momentum continued in many developed and emerging markets around the world, where our organic sales grew strongly and we realized prestige beauty share gains. Encouragingly, we returned to growth in the U.S., with fragrance, makeup and skin care all contributing. This performance partially offset the pressures of Asia travel retail and a slower recovery of overall prestige beauty in mainland China."
The executive added, "While we had a better-than-expected first quarter, we are lowering our fiscal 2024 outlook given incremental external headwinds, namely from the slower growth in overall prestige beauty in Asia travel retail and in mainland China, which is currently confirmed in the pre-sale phase of the 11.11 Shopping Festival, and the risks of business disruption in Israel and other parts of the Middle East. We are accelerating and expanding our profit recovery plan, to benefit fiscal years 2025 and 2026, to realize our ambitions to rebuild profitability despite the external headwinds’ increased pressure on the business in fiscal 2024.”