Sales Rise 3% at Lauder

The Estée Lauder Companies Inc. said net sales for its second quarter ended Dec. 31, 2013 rose 3% to $3.02 billion. Skin care net sales were approximately $48 million; makeup, $32 million; fragrance, $10 million; and hair care, approximately $4 million. By region, net sales in the Americas were $29 million; Europe, the Middle East & Africa, approximately $15 million; and Asia/Pacific, approximately $50 million. 

“Our fiscal second quarter sales growth was in line with our expectations, despite softer than expected markets in some geographies,” said Fabrizio Freda, president and CEO. “Earnings per share exceeded our forecast, due to strong results in several of our brands and high margin channels, as well as our ability to leverage costs. These results confirm that our business strategy is sound and effective. Adjusting for the accelerated sales orders in the prior year, our local currency sales increased more than 7%.”

Underscoring Estée Lauder’s sustainable growth is its strong and diverse portfolio of brands that is balanced by geography, product category and channel, according to Freda. Key drivers of sales gains in the quarter were the US and the UK, luxury and makeup artist brands, and online and travel retail channels.

“These factors and continued strength overall in emerging markets more than compensated for soft results in certain European countries and solid but slowing Chinese market growth,” said Freda.

According to the CEO, Lauder’s strategy prioritizes the fastest growing areas of its business to drive topline growth and increase profitability and margins.

“To achieve this, we plan to continue appropriate levels of targeted investment spending, while leveraging efficient cost management in other expense categories,” said Freda. “At the same time, we will bring a steady flow of new products to market and increase brand awareness by further expanding digital and social media capabilities and high-touch in-store service innovation.”

Looking ahead, Estée Lauder lowered its full fiscal year sales estimate to 6% to 7% in local currency, reflecting softening in some key markets.