Estée Lauder Cos. Sales Fall 10% in Fiscal 2023

The Estée Lauder Cos. said fiscal 2023 sales fell 10% to $15.91 billion. Organic net sales fell 6%, primarily driven by Asia travel retail in Hainan and Korea, partially offset by growth in nearly every market in both Asia/Pacific and Europe, the Middle East & Africa. Net earnings fell more than 50%, from $2.39 billion to $1.01 billion. What's worse, the company forecasted net FY2024 sales to increase 5-7%. That's below analysts’ estimates of 8.8%.

According to CEO Fabrizio Freda, for full-year fiscal 2023, ELC delivered organic sales growth and prestige beauty share gains in many developed and emerging markets.

“But Asia travel retail pressured results, particularly in skincare, and we continued to experience softness in North America,” admitted Freda. “Fragrance excelled, up double digits in every region and makeup improved sequentially to double-digit growth in the fourth quarter as more markets emerged into the post-pandemic era.” 

For the full year:
• Skincare sales fell 17% to $8.202 billion;
• Makeup sales fell 3% to $4.516 billion;
• Fragrance sales rose less than 1% to $2.512 billion;
• Haircare sales rose 3% to $653 million; and
• “Other” sales rose 10% to $54 million.

More specifically, by category…

Skincare net sales fell 14%. ELC blamed challenges in Asia travel retail, including the slower than anticipated recovery from the covid-19 pandemic. Net sales declined for Estée Lauder, La Mer and Dr.Jart+, partially offset by strong growth from The Ordinary, M·A·C and Bobbi Brown Cosmetics. Estée Lauder, La Mer and Dr.Jart+ net sales declined, primarily due to the challenges in Asia travel retail. Net sales from Estée Lauder and La Mer increased in Asia/Pacific, benefiting from Estée Lauder’s Revitalizing Supreme+ franchise line of products and The Moisturizing Soft Cream from La Mer. Strong double-digit net sales growth from The Ordinary reflected growth across every region and benefited from the continued strength from hero products, successful innovation, such as New! Multi-Peptide Lash & Brow Serum and the Multi-Peptide Eye Serum, the brand’s launch into India and the Middle East in fiscal 2023 and specialty-multi growth. Net sales from M·A·C rose strong double digits owing to the launch of the Hyper Real franchise line of products in the fiscal 2023 third quarter. The continued strength from hero products, such as Vitamin Enriched Face Base and Soothing Cleansing Oil, fueled double-digit net sales growth from Bobbi Brown Cosmetics.


Makeup net sales were virtually flat compared to the prior year and performance increased sequentially each quarter. Q4 sales rose 13%, reflecting growth in most markets as they continued to evolve in recovery and as usage occasions increased, offset by the challenges in Asia travel retail, including the slower than anticipated recovery from the pandemic. Net sales growth from MAC and Clinique was offset by the declines from Estée Lauder, Tom Ford and La Mer. Double-digit net sales growth from MAC benefited from hero products and recent launches, particularly in the face, lip and eye subcategories. The increase in net sales also reflected the benefit from changes to the brand’s take back loyalty program made in the fiscal 2023 second quarter. Net sales growth from Clinique reflected increases across every region, benefiting from strength in the lip, face and eye subcategories. Net sales from Estée Lauder and La Mer were unfavorably impacted by the challenges in Asia travel retail, partially offset by double-digit net sales growth in the markets of EMEA. Tom Ford net sales declined also owing to Asia travel retail, but grew double digits in Asia/Pacific and in the markets of EMEA.

Fragrance net sales rose 14%, reflecting double-digit growth across every region and led by Tom Ford, Estée Lauder and Le Labo. Tom Ford net sales rose in nearly every market, owing to continued strength from hero product franchises like Noir Extreme and Ombre Leather and benefiting from successful innovation, such as Tom Ford Noir Extreme Parfum. Net sales growth from Estée Lauder reflected the success from existing product franchises, such as Beautiful and Estée Lauder Pleasures. Le Labo net sales rose strong double digits, fueled by growth in every region and benefiting from continued strength from hero product franchises, such as Santal 33 and Another 13, and targeted expanded consumer reach, including the successful launch into mainland China at the end of the fiscal 2023 fourth quarter. Net sales declined from Jo Malone London, reflecting the challenges in Asia travel retail, partially offset by double-digit net sales growth in Asia/Pacific.

Hair care net sales rose 6%, primarily reflecting growth from both The Ordinary, due to the recent launch of the brand’s haircare products, and Aveda. Aveda’s net sales growth primarily reflected the fiscal 2023 launch of the brand in mainland China and strength in EMEA.

Despite the full year decline, Freda was optimistic, noting ELC returned to organic sales growth in the fourth quarter.

“Momentum continued in the markets of EMEA and Latin America, and accelerated strongly in Asia/Pacific led by mainland China and Hong Kong SAR,” he concluded.