02.03.22
The Estée Lauder Companies Inc. reported net sales of $5.54 billion for its second quarter ended December 31, 2021, an increase of 14% from $4.85 billion in the prior-year period.
Net sales grew in every region and product category, reflecting early stages of recovery in brick-and-mortar retail stores, primarily in western markets, and strength in online. These results reflected robust consumer response to holiday offerings and during key shopping moments. Organic net sales increased 11%.
Fabrizio Freda, president and chief executive officer said:
- “We achieved record sales and profitability in the second quarter of fiscal 2022, empowered by the timeless desirability of our brands and despite accelerated volatility and variability, as well as supply chain challenges, from the pandemic."
- Freda continues, "Every category, region and major channel expanded, showcasing the strength of our multiple engines of growth strategy. We seized the favorable dynamics of Skin Care, Fragrance, developed markets in the West, and brick-and-mortar, and continued to prosper in the East with Chinese consumers as well as in global Travel Retail and global Online.”
- Freda emphasized, “Our brands excelled in the key shopping moments of 11.11 and Holiday, welcoming new consumers and serving loyal consumers with festive exclusives, highly-sought hero products, enticing innovation, and elevated high-touch services in-store and online."
Skincare, Makeup & Fragrance Grow
- Skin care net sales grew in every region, led by strong double-digit sales growth from La Mer and Clinique.
- Makeup net sales increased, reflecting the continued progression towards recovery in western markets, increased usage occasions and easier comparisons to the prior year. The growth was led by Estée Lauder and M·A·C. Too Faced, Tom Ford Beauty and Smashbox also contributed to growth.
- Fragrance net sales grew in every region and across virtually all brands that sell fragrances, driven by continued resilience in luxury fragrance, the opening of brick-and-mortar retail and the beginning of travel recovery in western markets.
- Hair care net sales rose, reflecting increases from both Aveda and Bumble and bumble as brick-and-mortar salons and retail recover.
Regional Sales
Net sales grew strong double-digits in the United States, Canada and Latin America as brick-and-mortar reopened, retail traffic began to recover, and consumer demand was strong during the holidays. Net sales grew double digits in every product category and increased in every major distribution channel.Net sales in Europe, the Middle East and Africa grew in virtually every market, led by the United Kingdom. The growth reflects recovery in brick-and-mortar compared to the prior year when retail traffic was negatively impacted by Covid-19.
Net sales growth in Asia/Pacific reflected increases across much of the region, primarily driven by mainland China, Australia, and most of southeast Asia.
Long-term Outlook
The company is raising its full fiscal year outlook, reflecting both outstanding performance to date and the risks of continued volatility and disruptions in the second half of the year.Longer-term, the company expects to return to its growth targets of 6% to 8% sales growth, 50 basis points of operating margin expansion and double-digit adjusted diluted earnings per share growth in constant currency after a period of normalization as the impacts of the Covid-19 pandemic subside.