Charles Sternberg, Assistant Editor05.03.21
The Estée Lauder Companies Inc. reported net sales of $3.86 billion for its third quarter ended March 31, 2021, an increase of 16% on a reported basis, and 13% in constant currency, from $3.35 billion in the prior-year period.
Net sales grew in every region and in most product categories reflecting the recovery in several areas compared to the prior year where brick-and-mortar began to shut down as Covid-19 spread globally.
Fabrizio Freda, president and chief executive officer said, “We exceeded our sales and earnings expectations, even as several markets experienced increasing pressure from Covid-19 throughout the quarter. Our growth engines of Skin Care and Fragrance were incredibly powerful. Sales rose in every region, led by double-digit growth in Asia/Pacific, where many markets contributed and sales growth in mainland China accelerated. Online thrived as a growth engine, with sales having increased strong double-digits around the world, and Travel Retail excelled. Estée Lauder, La Mer, Jo Malone London, Clinique, and Tom Ford Beauty led the robust performance of many brands in our portfolio.
Segments
Skin care net sales increased 31% on a reported basis, led by Estée Lauder, La Mer and Clinique. Dr. Jart+ and Origins also contributed to growth.
Net sales in makeup declined 11%, with decreases across nearly all brands. The effects of the Covid-19 pandemic continued to disproportionately impact makeup usage, particularly foundation and lip, in most markets. Makeup sales rose slightly in Asia/Pacific, reflecting the more advanced recovery in the region, primarily in China where usage occasions are increasing.
Fragrance net sales grew 30%, primarily due to increases from Jo Malone London, Tom Ford Beauty, Kilian Paris and Estée Lauder.
Hair care net sales rose 8%, primarily reflecting successful innovation, including Botanical Repair, as well as strong double-digit online growth at Aveda.
Regions
Net sales increased in The Americas region reflecting growth in North America compared to the prior year where brick-and-mortar began to shut down in March 2020 due to Covid-19. This was somewhat offset by declines in Latin America where many retail locations closed as the resurgence of Covid-19 led to increased government restrictions during the quarter.
Net sales in Europe, the Middle East & Africa returned to growth, led by travel retail and online. Russia also contributed to growth.
Net sales growth in the Asia/Pacific region reflected increases in mainland China, Australia, Korea and several smaller markets.
Full Year Outlook
With multiple engines of growth across regions, brands, product categories and channels, The Estée Lauder Companies is confident it is well-positioned to drive a gradual recovery as macro-conditions and market dynamics support it. The company plans to invest in areas to support the recovery, including advertising, online and supply chain, to both drive growth in areas of opportunity and help nurture emerging trends in the rest of the business.
Reported net sales are forecasted to increase between 11% and 12% versus the prior-year period.
Net sales grew in every region and in most product categories reflecting the recovery in several areas compared to the prior year where brick-and-mortar began to shut down as Covid-19 spread globally.
Fabrizio Freda, president and chief executive officer said, “We exceeded our sales and earnings expectations, even as several markets experienced increasing pressure from Covid-19 throughout the quarter. Our growth engines of Skin Care and Fragrance were incredibly powerful. Sales rose in every region, led by double-digit growth in Asia/Pacific, where many markets contributed and sales growth in mainland China accelerated. Online thrived as a growth engine, with sales having increased strong double-digits around the world, and Travel Retail excelled. Estée Lauder, La Mer, Jo Malone London, Clinique, and Tom Ford Beauty led the robust performance of many brands in our portfolio.
Segments
Skin care net sales increased 31% on a reported basis, led by Estée Lauder, La Mer and Clinique. Dr. Jart+ and Origins also contributed to growth.
Net sales in makeup declined 11%, with decreases across nearly all brands. The effects of the Covid-19 pandemic continued to disproportionately impact makeup usage, particularly foundation and lip, in most markets. Makeup sales rose slightly in Asia/Pacific, reflecting the more advanced recovery in the region, primarily in China where usage occasions are increasing.
Fragrance net sales grew 30%, primarily due to increases from Jo Malone London, Tom Ford Beauty, Kilian Paris and Estée Lauder.
Hair care net sales rose 8%, primarily reflecting successful innovation, including Botanical Repair, as well as strong double-digit online growth at Aveda.
Regions
Net sales increased in The Americas region reflecting growth in North America compared to the prior year where brick-and-mortar began to shut down in March 2020 due to Covid-19. This was somewhat offset by declines in Latin America where many retail locations closed as the resurgence of Covid-19 led to increased government restrictions during the quarter.
Net sales in Europe, the Middle East & Africa returned to growth, led by travel retail and online. Russia also contributed to growth.
Net sales growth in the Asia/Pacific region reflected increases in mainland China, Australia, Korea and several smaller markets.
Full Year Outlook
With multiple engines of growth across regions, brands, product categories and channels, The Estée Lauder Companies is confident it is well-positioned to drive a gradual recovery as macro-conditions and market dynamics support it. The company plans to invest in areas to support the recovery, including advertising, online and supply chain, to both drive growth in areas of opportunity and help nurture emerging trends in the rest of the business.
Reported net sales are forecasted to increase between 11% and 12% versus the prior-year period.
