Weak consumer demand hits Estée Lauder sales
A combination of weak retail sales and high restructuring costs has impacted The Estée Lauder Companies’ fourth quarter results. The beauty giant’s net sales slipped 16% from $2.01bn in the fourth quarter of 2008 to $1.68bn in the same period of 2009, with Asia Pacific being the only region in which sales increased.
A combination of weak retail sales and high restructuring costs has impacted The Estée Lauder Companies’ fourth quarter results. The beauty giant’s net sales slipped 16% from $2.01bn in the fourth quarter of 2008 to $1.68bn in the same period of 2009, with Asia Pacific being the only region in which sales increased.
For the year the group’s net sales decreased 7% to $7.32bn and net earnings were just $218.4m as compared to $473.8m last year.
The company has blamed a lack of consumer demand caused by the worldwide economic downturn for these poor results in addition to inventory de-stocking by certain key retailers.
“While I am disappointed with our overall performance, throughout the fiscal year our company rallied to meet the challenging business conditions in the many regions of the world we serve,” commented William P Lauder, executive chairman of The Estée Lauder Companies. “We prioritised investments and accelerated cost reductions. We also realised our company to meet near-term needs and began implementing a restructuring programme to position us for the long term.”
These restructuring charges, which reached $91.7m pre-tax, also impacted the company’s net earnings for 2009.
Estée Lauder states that it will draw on the strength of its assets and employees in the coming fiscal year and the company predicts a less severe decrease in net sales of between 2% and 5% the first quarter of fiscal 2010.