In the US, prestige beauty and specialty retail show promise for The Estée Lauder Companies

By Deanna Utroske contact

- Last updated on GMT

In the US, prestige beauty and specialty retail show promise for The Estée Lauder Companies
The company announced impressive Q1 financial results this month, though most of the gains come from business in other regions.

The Estée Lauder Companies reported net sales in the Americas region at $1,329m for Q1 of 2018; that’s up 8% over the same quarter last year, which came in at $1,233m. Around the region, “sales in Canada increased low-single digits, and Latin America declined slightly. In constant currency, sales in Canada and Latin America each decreased moderately,” ​according to a press release about the company’s most recent financials.

Globally

Net sales globally for The Estée Lauder Companies for the quarter were at $3.27bn. That figure is up 14% over the prior-year quarter ($2.87bn.)

“We delivered an outstanding financial performance in our fiscal 2018 first quarter, demonstrating the power of our diverse brand portfolio to leverage our multiple engines of growth,” ​Fabrizio Freda, president and CEO of The Estée Lauder Companies tells the press.

“Building on the global momentum of the last fiscal year, we benefitted from a continued acceleration in China, Hong Kong, travel retail and global online, strength in several developed and emerging markets in Europe, and incremental sales from Too Faced and BECCA,” ​he explains.

Looking ahead, Freda is optimistic: “For the full fiscal year, our forecast reflects strong programs supported by focused advertising and marketing spending and sustained investments to further build capabilities for the long term. With this strong start to fiscal 2018 and our confidence in the potential for our business, we are raising our full-year constant currency sales growth forecast to between 8% and 9% and increasing our constant currency earnings per share growth estimate, before restructuring charges, to 12% to 14%.”

Category notes

Commenting on the Americas region in particular, Freda notes, “we saw encouraging signs of improvement in some US prestige department stores, and our targeted expansion into more specialty-multi doors to reach new consumers continued to help us gain share.”

In color cosmetics, despite what’s been termed an industry-wide boom in the category, the company’s sales of color here in the States saw some brands not doing as well for as expected. “Increases were partially offset by lower makeup sales in the United States, primarily from Clinique and Bobbi Brown, reflecting a soft retail environment due, in part, to slow foot traffic in some US brick-and-mortar stores,” ​according to the press release.

Skin care, by contrast, has been an industry concern since the category doesn’t seem to resonate as well with digital, mobile, social consumers who love the dramatic visuals that color can deliver. Nonetheless, in skin care "net sales increased sharply, with exceptional double-digit gains from Estée Lauder, La Mer, GlamGlow, and Origins.” 

In fragrance sales were up thanks to select brands—“primarily due to strong double-digit gains from luxury brands Jo Malone London, Tom Ford, and Le Labo.”

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