Estee Lauder Companies sales bounced back in Q3 from a lacklustre prior quarter.
The brand owner's Q2 was dogged by challenges in the beauty giant's Asia Travel Retail segment, as well as softer demand for prestige beauty in mainland China.
Sales increased by 5% to US$3.94bn, driven by standout performances from La Mer, Jo Malone London and The Ordinary.
Growth in Europe and the Middle East & Africa (EMEA), in addition to recovery in the Asia travel retail segment, also contributed to sales boost.
Net earnings came in at $330m as a result, an increase on the $156m reported during the same period last year.
The sales growth was partially offset by lower than expected net sales in mainland China, said Tracy Travis, Executive VP and CEO at ELC.
“ [This reflected] the impacts of ongoing softness and overall prestige beauty in part due to subdued consumer confidence and softness during holiday and key shopping moments,” she added.
Skin care sales increased by 9%, bolstered by double digit growth from La Mer.
The brand benefited from consistent sales of hero products, including its Treatment Lotion and Crème de la Mer and the recent launch of its The Moisturizing Fresh Cream.
Make-up sales also rose by 4%, with double digit growth from Estée Lauder and Clinique across all of ELC’s global operating markets.
Fragrance saw a more subdued performance in Q3, with sales rising by 1%.
Softer demand during key shopping periods resulted in lower shipments of Estée Lauder perfumes.
Sales of Jo Malone London’s English Pear and Wood Sage & Sea Salt perfumes, as well as its new Red Hibiscus edp, helped to offset the declines.
“For the third quarter of fiscal 2024, we delivered our organic sales outlook, exceeded expectations for profitability and continued to improve working capital,” said Fabrizio Freda, President and CEO
“Asia travel retail returned to organic sales growth, as developed and emerging markets across Asia/Pacific, EMEA and Latin America further contributed.”
The recovery in Q3 comes after ELC’s sales fell by 7% to $4.28bn in Q2 2024.
At the time, ELC announced plans to cut 3,100 jobs during the quarter in line with the business’ financial recovery plan.
The job cuts, ELC said, would incur restructuring charges of up to US$700m and are expected to bolster its profits and reduce overhead expenses in the long term.
They will involve the complete removal of a number of positions, as well as the retraining and redeployment of certain staff members to other areas of the business.
