• Lux is back in a big way. Estée Lauder’s fiscal 2012 sales rose 10% to $9.71 billion. Excluding the impact of foreign currency translation, net sales also increased 10% from a year ago. The company reported a 110 basis point increase in operating margin and net earnings for the year rose 22% to $856.9 million.
Net sales increased in each category in every region at Estée Lauder, according to its recent 2012 fiscal report.
“In fiscal 2012, we grew sales, net earnings and earnings per share by double digits. Our sales grew at twice the rate of worldwide prestige beauty, owing to the success of our highly innovative products, marketing prowess and personalized services,” he continued.
Freda noted that despite pockets of economic uncertainty around the globe, Lauder’s sales growth was broad-based, with strong gains in every geographic region and product category and many distribution channels.
“Financial discipline throughout our company enabled us to bring much of our sales growth to the bottom line. Our operating margin increased 120 basis points to a record 14.2%—exceeding our original forecast—and operating cash flow reached an all-time high of $1.1 billion,” he added.
Moving forward, the company said it will continue to focus its efforts and resources in the most promising areas for prestige beauty, including emerging markets, travel retail and digital. At the same time, company executives expect to generate further cost savings and improve profitability.
“While we are positive about our long-term outlook we are cautious of further weakening in certain global markets,” said Freda. “Nonetheless, we are confident in our growth prospects and we are extending our financial goals to fiscal 2015 and raising our operating margin target to 15.5-16%.”
The company’s performance was due to solid overall business, particularly from its largest brands. The company reported sales gains in each of its product categories and geographic regions. Net sales also grew in each major product category within each region. Sales growth was particularly strong in travel retail and overall in emerging markets, along with solid gains in several developed countries.
During the fiscal year, the company made substantial progress on its previously stated strategic goals, with a strong improvement in cost of sales as a percentage of net sales. All product categories and geographic regions benefited from company-wide efforts to reduce or eliminate non-value-added costs.
In connection with the long-term strategic plan and certain ongoing initiatives, the company realized savings of $145 million during the year. As a percentage of net sales, advertising, merchandising and sampling expenses increased to support the company’s biggest innovations, while all other significant operating expenses were lower. Gross margin expanded 140 basis points and operating margin raised 120 basis points, before restructuring charges.
Blyth To Issue IPO for ViSalus
• Blyth, Inc., owner of direct selling fitness and weight management company ViSalus, has filed a registration statement on Form S-1 with the US Securities and Exchange Commission (SEC) for a potential initial public offering (IPO) of its Class A common stock. The registration statement has been filed by FVA Ventures, Inc., which will be renamed ViSalus, Inc. in connection with the IPO.
Following the IPO, Blyth will continue to own more than 50% of ViSalus’ common stock. The number of shares to be offered and the price range for the offering have not yet been determined. A portion of the shares to be offered in the IPO will be issued and sold by ViSalus, and certain stockholders of ViSalus will sell a portion.
A registration statement relating to these securities has been filed with the SEC, and is available on the SEC’s website at www.sec.gov, but has not yet become effective.
Fiscal 2012 Sales Rise 5.3% at Elizabeth Arden
• Elizabeth Arden, Inc. revealed financial results for its fourth fiscal quarter and fiscal year ended June 30, 2012. For the quarter ended June 30, 2012, the company reported a 4.6% increase in net sales to $265.5 million.
For the year ended June 30, 2012, the company reported a 5.3% rise in net sales to $1.24 billion. Net sales growth in North America benefitted from the strong sales performance in the prestige business, according to the company.
E. Scott Beattie, chairman, president and chief executive officer of Elizabeth Arden, Inc., commented, “This was an important year for our company as we reported another year of solid earnings growth and margin expansion, while significantly advancing our key initiatives. For fiscal 2013, we expect strong sales growth and another year of improved operating performance.”
Beattie continued, “Consistent improvement in our operational metrics continues to be driven by the building blocks of our Global Efficiency Re-engineering initiative that has created an efficient and scalable global operational platform. This, combined with tremendous efficiency in working capital management, bodes well as we grow our business. As we look ahead, our priorities are focused on accelerating the global growth of the Elizabeth Arden brand, expanding sales of our fragrance portfolio, particularly in Europe, integrating and growing our newly-acquired fragrance brands, and continuing to drive operational efficiencies. These are the key initiatives driving our margins, earnings and return on invested capital over the next several years.”
For fiscal 2013, net sales are expected to increase by 13.5% to 15.0% over the prior fiscal year.
A Lift in Q2 Sales at Macy’s
• Macy’s Inc.’s net income rose nearly 16% to $279 million, while sales in the second quarter rose 3% on a comparable store basis to $6.12 billion.
“We were pleased with our spring season results, and they came on top of exceptionally strong spring season performances in each of the past two years. This indicates that our business continues to have forward momentum, even with challenges that include a soft economy, lower spending by international tourists and temporary disruptions associated with the major remodeling of our Herald Square flagship store in New York City which was initiated in March,” said Terry J. Lundgren, Macy’s chairman, president and chief executive officer.
Profits Leap at L’Oréal
• L’Oréal said its first-half net profits rose 10.8% to $2.11 billion and confirmed it expects to outperform the market this year. Operating profits increased 11.4% to $2.46 billion. The company’s sales for the period rose 10.5% to $14.55 billion.
“With strong growth in sales and results, the first half of 2012 confirms the group’s good dynamics,” said Jean-Paul Agon, L’Oréal chairman and chief executive officer. “L’Oréal is continuing to strengthen its positions, and thus reinforcing its leadership of the worldwide cosmetics market.”
He continued, “The growth in results confirms the relevance of our business model: Although it is important to emphasize that half-year figures are not particularly representative, this performance reflects the group’s ability to build solid and profitable growth.
“Bolstered by these results and despite the uncertainties of the economic environment, we confirm for 2012 our ambition to outperform the market and achieve another year of growth in sales, results and profitability,” stated Agon.
L’Oréal also said its board has decided to buy back company shares for a maximum amount of €500 million, or $628.3 million at current exchange, by Dec. 31 after which date they will be canceled.