The Estée Lauder Companies has announced its second quarter 2024 results, which showed net sales were $4.28 billion, a decline of 7% from $4.62 billion in the previous year.
Net earnings were $313 million, as compared to $394 million in the previous year.
Skin Care
Net sales were $2,173 million, as compared to $2,427 million in the previous year. Net sales from Estée Lauder, Clinique and Origins declined.
Estée Lauder net sales increased double digits in The Americas, reflecting growth from the Advanced Night Repair product franchise, including the fiscal 2024 launches of Advanced Night Repair Rescue Solution with Bifidus Ferment and Advanced Night Cleansing Balm, and the recent launch of the Nutritious line of products.
There was double-digit net sales growth from The Ordinary and M·A·C.
Makeup
Net sales were $1,167 million, as compared to $1,263 million in the previous year.
M·A·C net sales decreased, primarily due to the phasing out of select products in preparation for new product launches and a benefit in the prior-year period as a result of changes to M·A·C’s take back loyalty program, globally, as well as the challenges in Asia travel retail.
Net sales from Estée Lauder decreased, primarily due to the challenges in Asia travel retail.
There was double-digit net sales growth from Clinique.
Fragrance
Net sales were $737 million, compared to $734 million in the previous year.
Net sales from Le Labo grew strong double digits. Jo Malone London net sales also increased.
Hair Care
Net sales were $173 million, as compared to $183 million in the previous year.
Six Month Results
For the six months ended December 31, 2023, the company reported net sales of $7.80 billion, a 9% decrease as compared to $8.55 billion in the previous year.
Fiscal 2025 and 2026 Profit Recovery Plan
The Estée Lauder Companies is expanding its Profit Recovery Plan for fiscal years 2025 and 2026 to include a restructuring program.
The plan is designed to improve gross margin, lower the cost base and reduce overhead expenses, while increasing investments in key consumer-facing activities.
In connection with the restructuring program, the company estimates a net reduction in the range of approximately 3-5% of its positions as of June 30, 2023. This reduction takes into account the elimination of some positions, as well as retraining and redeployment of certain employees in select areas.
Fabrizio Freda, president and CEO said, “For the second quarter of fiscal 2024, we delivered our organic sales outlook and exceeded expectations for profitability. The Ordinary and La Mer in skin care, Clinique in makeup, and Le Labo and Jo Malone London in fragrance performed strongly. Many developed and emerging markets around the world continued to grow organically and at retail. While mainland China and Asia travel retail declined, our retail sales trended ahead of organic sales, and these businesses are poised to return to organic sales growth in the second half. We made progress in the first half across several strategic priorities, including reducing inventory in the trade of Asia travel retail, improving working capital, realizing higher levels of net pricing, and managing expenses with discipline. We are, encouragingly, at an inflection point. In the second half of fiscal 2024, we are positioned to return to strong organic sales growth and expand our profitability from the first half. Moreover, today we have announced that we are further expanding our Profit Recovery Plan, which benefits fiscal years 2025 and 2026, to include a restructuring program. We believe this now-larger plan will better position the company to restore stronger, and more sustainable, profitability while also supporting sales growth acceleration and increasing agility and speed-to-market.”
