Estee Lauder net sales rise 11%

Published: 2-May-2014

The results exceeded the company\'s expectations

The Estée Lauder Companies has reported an 11% increase in net sales for its third quarter ended 31 March 2014 compared to the prior-year quarter, reaching US$2.55bn. Excluding the impact of foreign currency translation, net sales increased 12%. Excluding charges principally related to a remeasurement of the exchange rate it used to remeasure its Venezuelan net monetary assets (as a result of changes the Venezuelan government made to its foreign currency exchange rate regulations), net earnings for the three months were $251.7m.

Skin care benefited from the strong pipeline of innovative products, the company said, gaining share in certain countries where its products are sold. Recent launches of the new Advanced Night Repair Synchronized Recovery Complex II and Micro Essence Skin Activating Treatment Lotion from Estée Lauder and Dramatically Different Moisturizing Lotion + and Even Better Essence Lotion from Clinique contributed to growth, as did sales from the reformulated Repairwear Laser Focus by Clinique and luxury skin care brand, La Mer.

In make-up, growth came from the company’s make-up artist brands and from recent launches, such as Pure Color Envy Sculpting Lipstick from Estée Lauder and All About Shadow from Clinique. There were also increased sales from Smashbox and the Tom Ford line of cosmetics.

In fragrance, strong sales growth came from luxury brands Tom Ford and Jo Malone, as well as the recent launches of Estée Lauder Modern Muse, Tory Burch and the Michael Kors Fragrance Collection. However, fragrance operating loss increased, as a result of the Venezuela remeasurement charge.

Hair care net sales growth was primarily driven by Aveda, reflecting gains in the salon channel and the continued success of its Dry Remedy and Damage Remedy franchises. Sales also increased at Bumble and bumble, primarily due to higher sales to specialty-multi brand retailers. However, Ojon sales decreased, primarily due to its exit from the direct response television channel, the company said.

Regionally, sales increased in most areas, except Thailand, Korea and the Philippines.

Fabrizio Freda, President and Chief Executive Officer, said, “Our excellent results this quarter reflect our multiple engines of growth across product categories, countries and channels, enabling us to achieve strong local currency sales growth in every geographic region. Sales came in higher than our expectations and we again exceeded our earnings per share forecast. These results were driven by the broad global demand for our diverse prestige beauty brands, the strength of our emerging markets, accelerated growth in certain developed markets and solid progress in skin care.”

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