08.19.21
The Estee Lauder Companies Inc. said fiscal 2021 sales soared 13% to mroe than $16.2 billion in net sales. The company registered gains in every region and most product categories, which positively impacted brick-and-mortar retail stores as they gradually reopened following their closures during the second half of 2020 due to the COVID-19 pandemic.
Two of its percentage points are attributed to the Company’s acquisition of Have&Be Co. Ltd. (Dr. Jart+) and its increased ownership of Deciem Beauty Group whose big-name beauty brand is The Ordinary.
Estee Lauder’s net earnings were $2.87 billion, well ahead of last year’s earning which were $680 million.
According to CEO Fabrizio Freda, the company’s skin care, luxury and artisanal fragrance and travel retail in Asia/Pacific, in addition to its global online markets performed “exceptionally well.” Estee Lauder, La Mer and Jo Malone London led eight of the Company’s brands to double-digit sales growth.
The company credits its rapid growth to its investment in an innovation center in Shanghai and a manufacturing facility near Tokyo, among other power moves.
The company said fiscal fourth quarter sales soared 62% to more than $2.4 billion.
“We delivered outstanding results in fiscal 2021, capped by an exceptional fourth quarter and powered by our multiple engines of growth strategy, as well as the timeless desirability of prestige beauty. Notably, both sales and profitability meaningfully exceeded fiscal 2019 performance,” said Freda. “Amid the challenges of the pandemic, we invested in near- and long-term growth opportunities and managed costs elsewhere with discipline, while making important progress on our social impact commitments and sustainability goals.”
Segment Results
During fiscal year 2021, skin care net sales grew across every region, led by Estée Lauder, La Mer and Clinique. Estée Lauder delivered double-digit growth, reflecting growth in all regions, with significant strength in mainland China. Strong double-digit growth from La Mer was driven by significant strength among Chinese consumers in both mainland China and travel retail. Clinique delivered double-digit growth in every region driven by strong demand for its hero products.
Makeup net sales declined among nearly all brands, led by M·A·C and Clinique. These declines were partially offset by growth at Too Faced and La Mer. The effects of Covid-19 disproportionately impacted makeup usage, particularly foundation and lip, in most markets. Makeup sales rose in the second half of the fiscal year in every region, reflecting the more advanced recovery in China and the easier comparisons to the second half of the prior year as COVID-19 spread globally.
Fragrance net sales grew, largely due to increases from Jo Malone London, Tom Ford Beauty, Le Labo, Kilian Paris, certain designer fragrances and Editions de Parfums Frédéric Malle. Fragrance growth accelerated during the year driven by continued resilience in luxury fragrance during the pandemic as well as easier comparisons in the second half of the fiscal year.
Hair care net sales rose, primarily reflecting successful innovation at Aveda, including Botanical Repair, and growth from existing product franchises, including Nutriplenish and Invati. Aveda’s online sales grew strong double digits, reflecting the brand’s expanded online services which drove sales to the channel while many salons and freestanding stores were closed.
What's Ahead for 2022
Freda says the company’s current financial position will be a driver for its future success.
“We delivered outstanding results in fiscal 2021, capped by an exceptional fourth quarter and powered by our multiple engines of growth strategy, as well as the timeless desirability of prestige beauty. Notably, both sales and profitability meaningfully exceeded fiscal 2019 performance,” said Freda. “Amid the challenges of the pandemic, we invested in near- and long-term growth opportunities and managed costs elsewhere with discipline, while making important progress on our social impact commitments and sustainability goals.”
Segment Results
During fiscal year 2021, skin care net sales grew across every region, led by Estée Lauder, La Mer and Clinique. Estée Lauder delivered double-digit growth, reflecting growth in all regions, with significant strength in mainland China. Strong double-digit growth from La Mer was driven by significant strength among Chinese consumers in both mainland China and travel retail. Clinique delivered double-digit growth in every region driven by strong demand for its hero products.
Makeup net sales declined among nearly all brands, led by M·A·C and Clinique. These declines were partially offset by growth at Too Faced and La Mer. The effects of Covid-19 disproportionately impacted makeup usage, particularly foundation and lip, in most markets. Makeup sales rose in the second half of the fiscal year in every region, reflecting the more advanced recovery in China and the easier comparisons to the second half of the prior year as COVID-19 spread globally.
Fragrance net sales grew, largely due to increases from Jo Malone London, Tom Ford Beauty, Le Labo, Kilian Paris, certain designer fragrances and Editions de Parfums Frédéric Malle. Fragrance growth accelerated during the year driven by continued resilience in luxury fragrance during the pandemic as well as easier comparisons in the second half of the fiscal year.
Hair care net sales rose, primarily reflecting successful innovation at Aveda, including Botanical Repair, and growth from existing product franchises, including Nutriplenish and Invati. Aveda’s online sales grew strong double digits, reflecting the brand’s expanded online services which drove sales to the channel while many salons and freestanding stores were closed.
What's Ahead for 2022
Freda says the company’s current financial position will be a driver for its future success.
“We begin fiscal 2022 as a stronger company thanks to our employees, whose compassion, creativity, and resolve have been extraordinary during the pandemic. Our success in the past year gives us confidence for the new year, as volatility and variability from COVID-19 are likely to persist for some time to come. For fiscal 2022, we expect strong net sales and adjusted earnings per share growth with continued margin expansion. Our growth engines are poised to increasingly diversify as makeup and hair care, developed markets in the west, and brick-and-mortar retail gradually recover and complement the strength of our existing growth engines. We anticipate that growth in emerging markets will also resume over time as the impacts of the pandemic abate.”