Estée Lauder delighted by Q1 results
Investment in advertising sees double digit growth for beauty group
The Estée Lauder Companies reported net sales of $2.09bn at the end of quarter one, ending 30 Sept 2010, an increase of 14% from $1.83bn in the same quarter 2009. Net earnings for the quarter rose 36% to $191.1m.
Chief executive and president Fabrizio Freda said: "We had an excellent quarter and made a strong entrance into fiscal 2011 with solid, double-digit top and bottom line growth. Our results included acceleration in the US, where we generated robust sales growth, and continued strong gains from our international business. Strong worldwide demand for our products resulted from our superb innovations, supported by targeted advertising and our high-touch selling model. Our decision to invest substantial funds in advertising spending during the previous quarter built momentum in our businesses, and the impact of that strategic decision is reflected in our strong sales growth this quarter. These factors, coupled with a weaker US dollar, resulted in record first-quarter sales, operating margin, profits and earnings per share.”
The company reported significant growth in each of its geographic regions and most product categories. Sales growth was led by the company's international businesses, particularly in emerging markets and travel retail, which has been helped by an increase in global air travel. These results show the positive impact of targeted advertising spending and solid increases from higher margin product launches.
By region, first quarter sales in the Americas rose 12%, Europe rose by 13% and total Asia Pacific sales grew 16%. Increased demand in China, Hong Kong and Taiwan helped offset declines in Australia and Japan.
Skincare sales rose 17%, make-up demand grew 11%, fragrance sales increased 15% but hair care was down 4%.