10.25.21
The Estée Lauder Companies is #3 on this year's list of Top Global Beauty Companies.
Below is a look at the company's 2021 highlights, recent acquisitions, best-selling brands, and latest innovations.
Beauty Sales
$16 billion
Key Personnel
William P. Lauder, executive chairman; Fabrizio Freda, president and chief executive officer; John Demsey, executive group president; Carl Haney, executive vice president, research, product and innovation officer; Jane Hertzmark Hudis, executive group president; Jane Lauder, executive vice president, enterprise marketing and chief data officer; Leonard Lauder, chairman emeritus; Ronald S. Lauder, chairman, Clinique Laboratories, LLC; Gregory F. Polcer, executive vice president, global supply chain; Roberto Magana, senior vice president and chief procurement officer; Cedric Prouvé, group president, international; Sue Fox, president, UK, Ireland; Ukachi Anonyuo, vice president, global packaging innovation strategy & portfolio management; Michelle Freyre, global brand president, Clinique; Glenn Evans, global brand president, Smashbox and GLAMGLOW
Major Products
More than 25 prestige skin care, makeup, fragrance and hair care brands sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, Tommy Hilfiger, M·A·C, La Mer, Bobbi Brown, DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors, Darphin Paris, Tom Ford Beauty, Smashbox, Ermenegildo Zegna, AERIN, Le Labo, Editions de Parfums Frédéric Malle, Glamglow, Kilian Paris, Too Faced, Dr.Jart+, DECIEM (including The Ordinary and NIOD)
New Products
Estée Lauder Beautiful Magnolia fragrance, Estée Lauder Advanced Night Repair Intense Reset Concentrate and Perfectionist Rapid Brightening Treatment Serum, La Mer Eye Concentrate, La Mer The Regenerating Serum, Clinique Even Better Clinical Dark Spot Corrector and Interrupter, Jo Malone London Poppy & Barley, Tom Ford Metallique, Aveda Nutriplenish line, Smashbox Halo Plumping Dew, MAC Cosmetics X Harris Reed
Comments
Even with global travel at a relative standstill and department and freestanding store retail mostly shut down as a result of Covid-19, the prestige beauty powerhouse, which turns 75 years old this year!—The Estée Lauder Companies (ELC)—reported net sales of $16.22 billion for its fiscal year ended June 30, 2021, an impressive increase of 13% from $14.29 billion in the prior-year period. The company’s edge on technology and a focus on e-commerce led to robust online sales which made up for soft brick-and-mortar results—and boosted ELC’s bottom line. Online net sales showed strong double-digit growth for fiscal 2020, as well as growth in all product categories and from nearly every brand.
Net sales grew in every region and in most product categories, as a gradual reopening of brick and mortar and travel began. Incremental net sales from ELC’s acquisition of Have&Be Co. Ltd. (Dr. Jart+) and the increase in its ownership of Deciem Beauty Group contributed 2 percentage points of growth to reported net sales.
Commenting on the year’s results, Fabrizio Freda, president and chief executive officer said, “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. 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.
“Our growth engines of Skin Care, luxury and artisanal Fragrance, Asia/Pacific, travel retail in Asia/Pacific, and global Online performed exceptionally well. Innovation soared and eight of our brands grew sales double-digits, led by Estée Lauder, La Mer and Jo Malone London. We amplified the strength of our skin care portfolio as we became majority owners of DECIEM, with its coveted brand The Ordinary. We also invested in an innovation center in Shanghai and a manufacturing facility near Tokyo to enhance our rapid growth in the region.”
Skin Care Net Sales
Skin Care net sales increased in every region in fiscal 2021, reaching $9.5 billion—and led by Estée Lauder, La Mer and Clinique. Incremental net sales of Dr. Jart+ and the increase in ownership of DECIEM contributed approximately 4 percentage points to growth.
Estée Lauder delivered double-digit growth, with strong results in mainland China. The brand also delivered double-digit growth in travel retail and online, driven by hero franchises, including Advanced Night Repair, Nutritious, Micro Essence, Revitalizing Supreme+ and Re-Nutriv, in part due to new product launches of Advanced Night Repair Synchronized Multi-Recovery Complex and Revitalizing Supreme+ Bright.
Strong double-digit growth from La Mer was attributed to Chinese consumers in both mainland China and travel retail. Online sales also grew double digits globally. Net sales growth was driven by increases in hero products, including The Treatment Lotion, Crème de la Mer, The Concentrate and The Moisturizing Soft Cream.
Clinique delivered double-digit growth in every region driven by strong demand for its hero products, including the Dramatically Different products and Even Better Clinical Radical Dark Spot Corrector + Interrupter.
Makeup Net Sales
Makeup net sales decreased to $4.2 billion, with losses from nearly all brands, led by M·A·C and Clinique. These declines were partially offset by growth at Too Faced and La Mer. However, makeup sales rose in the second half of the fiscal year in every region, reflecting the more advanced recovery in China.
Fragrance Net Sales
A trend toward luxury fragrance continued, with Fragrance net sales rising to $1.9 billion, thanks especially to increases from Jo Malone London, Tom Ford Beauty, Le Labo, Kilian Paris and Editions de Parfums Frédéric Malle.
Jo Malone London’s net sales grew double digits primarily driven by strength in colognes, including the new Blossoms Collection. Bath & Body and Home also delivered strong growth reflecting consumer demand for home fragrance products during the pandemic.
Tom Ford Beauty grew strong double-digits, highlighting the launches of Bitter Peach and Rose Prick Private Blend fragrances.
Hair Care Net Sales
Even with salons closed, Hair Care net sales were up, reaching $571 million, owing in particular to innovation at Aveda, including Botanical Repair. Aveda’s online sales grew strong double digits.
Net Sales by Region
Reported net sales in The Americas increased slightly to $3.8 billion (+1%), indicating a gradual comeback from retail closures. Online sales grew double digits in The Americas, accounting for 40% of sales, as the company utilized new and existing digital capabilities, which more than made up for declines from light traffic in brick-and mortar.
In North America, double-digit growth in the fragrance category and strong growth in skin care were mostly offset by the impact of the pandemic on the makeup category.
A 9% rise in net sales was recorded in Europe, the Middle East & Africa (EMEA) to reach $6.9 billion, led by travel retail and online orders. During the fourth quarter, rising vaccination rates allowed some markets to re-open. Net sales from the company’s global travel retail business increased year-over-year due mostly to growth in Asia/Pacific driven by China domestic travel, especially in Hainan, and Korea, which offset other losses in the region. Online sales rose strong double-digits, reflecting ELC’s increased focus on reaching consumers digitally.
Net sales in Asia/Pacific—particularly in mainland China, Korea, Australia and several smaller markets—showed the strongest percentage of growth, up 22% to $5.5 billion. Dr. Jart+ and the increase in ownership of DECIEM contributed approximately 6 percentage points to net sales growth.
Skin care, fragrance and hair care net sales grew strong double-digits in the region, while makeup net sales declined slightly.
ELC continued to invest in digital marketing, which drove strong double-digit online sales growth. Sales of the company’s products online represented 36% of sales for the fiscal year. Department stores, specialty multi and freestanding stores grew double digits as well.
In mainland China, net sales grew strong double digits led by continued strength in skin care, an uptick in fragrance growth and the trend toward recovery in makeup during the year. Nearly every brand grew, led by luxury brands, and sales increased double digits in every channel.
On August 20, 2020, ELC announced a two-year restructuring program, Post-COVID Business Acceleration Program, designed to resize their business against dramatic shifts in the wake of the Covid-19 pandemic. The Restructuring Program’s main areas of focus include accelerating the shift to online with the realignment of their distribution network reflecting freestanding store and certain department store closures, with a focus on North America and Europe, the Middle East & Africa; the reduction in brick-and-mortar point of sale employees and related support staff; and the redesign of the company’s regional branded marketing organizations, plus select opportunities in global brands and functions.
2021 Highlights
In February, Lauder paid $1 billion to increase its ownership in wildly popular, industry-disruptor, Canadian-based DECIEM to 76%, valuing the company at $2.2 billion. In three years, ELC plans to buy the rest of the company.
With industry growth in sales of skin care and a drop in color cosmetics, a day after announcing the DECIEM deal, ELC announced it would be closing Becca Cosmetics.
By 2025, ELC says 75-100% of its packaging will be recyclable, refillable, reusable, recycled or recoverable. Additionally, the company will increase the amount of post-consumer recycled material in its packaging by up to 50% in the same year.
In April, ELC announced it was shutting down operations for Rodin Olio Lusso.
In June, Clinique announced their new global brand ambassador, Melissa Barrera, a Mexican actress and singer and star of the film ‘In the Heights.’
Just last month, poet laureate extraordinaire Amanda Gorman was named Global Changemaker at Estée Lauder’s flagship brand—and will be featured in brand campaigns starting in 2022. She will also work with them on a corporate level to create Writing Change, helping to award $3 million in grants to promote literacy among girls and women — and access to equity and social change.
Looking Ahead
ELC plans to approve specific initiatives under the Restructuring Program through fiscal 2022 and expects to complete those initiatives through fiscal 2023, with savings of $400-$500 million, before taxes. They then plan to reinvest a portion in future growth initiatives.
When commenting on 2021 results, Freda emphasized, “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.”
For first quarter fiscal 2022, reported net sales are forecasted to increase between 17% and 19% versus the prior year period.
For full year fiscal 2022, reported net sales are forecasted to increase between 13% and 16% versus the prior year period. This is ahead of the company’s long-term goal of 6% to 8% as the business begins to normalize as it recovers from the impacts of Covid-19.
Read Next: Procter & Gamble is #4.
Below is a look at the company's 2021 highlights, recent acquisitions, best-selling brands, and latest innovations.
Beauty Sales
$16 billion
Key Personnel
William P. Lauder, executive chairman; Fabrizio Freda, president and chief executive officer; John Demsey, executive group president; Carl Haney, executive vice president, research, product and innovation officer; Jane Hertzmark Hudis, executive group president; Jane Lauder, executive vice president, enterprise marketing and chief data officer; Leonard Lauder, chairman emeritus; Ronald S. Lauder, chairman, Clinique Laboratories, LLC; Gregory F. Polcer, executive vice president, global supply chain; Roberto Magana, senior vice president and chief procurement officer; Cedric Prouvé, group president, international; Sue Fox, president, UK, Ireland; Ukachi Anonyuo, vice president, global packaging innovation strategy & portfolio management; Michelle Freyre, global brand president, Clinique; Glenn Evans, global brand president, Smashbox and GLAMGLOW
Major Products
More than 25 prestige skin care, makeup, fragrance and hair care brands sold in approximately 150 countries and territories under brand names including: Estée Lauder, Aramis, Clinique, Lab Series, Origins, Tommy Hilfiger, M·A·C, La Mer, Bobbi Brown, DKNY, Aveda, Jo Malone London, Bumble and bumble, Michael Kors, Darphin Paris, Tom Ford Beauty, Smashbox, Ermenegildo Zegna, AERIN, Le Labo, Editions de Parfums Frédéric Malle, Glamglow, Kilian Paris, Too Faced, Dr.Jart+, DECIEM (including The Ordinary and NIOD)
New Products
Estée Lauder Beautiful Magnolia fragrance, Estée Lauder Advanced Night Repair Intense Reset Concentrate and Perfectionist Rapid Brightening Treatment Serum, La Mer Eye Concentrate, La Mer The Regenerating Serum, Clinique Even Better Clinical Dark Spot Corrector and Interrupter, Jo Malone London Poppy & Barley, Tom Ford Metallique, Aveda Nutriplenish line, Smashbox Halo Plumping Dew, MAC Cosmetics X Harris Reed
Comments
Even with global travel at a relative standstill and department and freestanding store retail mostly shut down as a result of Covid-19, the prestige beauty powerhouse, which turns 75 years old this year!—The Estée Lauder Companies (ELC)—reported net sales of $16.22 billion for its fiscal year ended June 30, 2021, an impressive increase of 13% from $14.29 billion in the prior-year period. The company’s edge on technology and a focus on e-commerce led to robust online sales which made up for soft brick-and-mortar results—and boosted ELC’s bottom line. Online net sales showed strong double-digit growth for fiscal 2020, as well as growth in all product categories and from nearly every brand.
Net sales grew in every region and in most product categories, as a gradual reopening of brick and mortar and travel began. Incremental net sales from ELC’s acquisition of Have&Be Co. Ltd. (Dr. Jart+) and the increase in its ownership of Deciem Beauty Group contributed 2 percentage points of growth to reported net sales.
Commenting on the year’s results, Fabrizio Freda, president and chief executive officer said, “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. 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.
“Our growth engines of Skin Care, luxury and artisanal Fragrance, Asia/Pacific, travel retail in Asia/Pacific, and global Online performed exceptionally well. Innovation soared and eight of our brands grew sales double-digits, led by Estée Lauder, La Mer and Jo Malone London. We amplified the strength of our skin care portfolio as we became majority owners of DECIEM, with its coveted brand The Ordinary. We also invested in an innovation center in Shanghai and a manufacturing facility near Tokyo to enhance our rapid growth in the region.”
Skin Care Net Sales
Skin Care net sales increased in every region in fiscal 2021, reaching $9.5 billion—and led by Estée Lauder, La Mer and Clinique. Incremental net sales of Dr. Jart+ and the increase in ownership of DECIEM contributed approximately 4 percentage points to growth.
Estée Lauder delivered double-digit growth, with strong results in mainland China. The brand also delivered double-digit growth in travel retail and online, driven by hero franchises, including Advanced Night Repair, Nutritious, Micro Essence, Revitalizing Supreme+ and Re-Nutriv, in part due to new product launches of Advanced Night Repair Synchronized Multi-Recovery Complex and Revitalizing Supreme+ Bright.
Strong double-digit growth from La Mer was attributed to Chinese consumers in both mainland China and travel retail. Online sales also grew double digits globally. Net sales growth was driven by increases in hero products, including The Treatment Lotion, Crème de la Mer, The Concentrate and The Moisturizing Soft Cream.
Clinique delivered double-digit growth in every region driven by strong demand for its hero products, including the Dramatically Different products and Even Better Clinical Radical Dark Spot Corrector + Interrupter.
Makeup Net Sales
Makeup net sales decreased to $4.2 billion, with losses from nearly all brands, led by M·A·C and Clinique. These declines were partially offset by growth at Too Faced and La Mer. However, makeup sales rose in the second half of the fiscal year in every region, reflecting the more advanced recovery in China.
Fragrance Net Sales
A trend toward luxury fragrance continued, with Fragrance net sales rising to $1.9 billion, thanks especially to increases from Jo Malone London, Tom Ford Beauty, Le Labo, Kilian Paris and Editions de Parfums Frédéric Malle.
Jo Malone London’s net sales grew double digits primarily driven by strength in colognes, including the new Blossoms Collection. Bath & Body and Home also delivered strong growth reflecting consumer demand for home fragrance products during the pandemic.
Tom Ford Beauty grew strong double-digits, highlighting the launches of Bitter Peach and Rose Prick Private Blend fragrances.
Hair Care Net Sales
Even with salons closed, Hair Care net sales were up, reaching $571 million, owing in particular to innovation at Aveda, including Botanical Repair. Aveda’s online sales grew strong double digits.
Net Sales by Region
Reported net sales in The Americas increased slightly to $3.8 billion (+1%), indicating a gradual comeback from retail closures. Online sales grew double digits in The Americas, accounting for 40% of sales, as the company utilized new and existing digital capabilities, which more than made up for declines from light traffic in brick-and mortar.
In North America, double-digit growth in the fragrance category and strong growth in skin care were mostly offset by the impact of the pandemic on the makeup category.
A 9% rise in net sales was recorded in Europe, the Middle East & Africa (EMEA) to reach $6.9 billion, led by travel retail and online orders. During the fourth quarter, rising vaccination rates allowed some markets to re-open. Net sales from the company’s global travel retail business increased year-over-year due mostly to growth in Asia/Pacific driven by China domestic travel, especially in Hainan, and Korea, which offset other losses in the region. Online sales rose strong double-digits, reflecting ELC’s increased focus on reaching consumers digitally.
Net sales in Asia/Pacific—particularly in mainland China, Korea, Australia and several smaller markets—showed the strongest percentage of growth, up 22% to $5.5 billion. Dr. Jart+ and the increase in ownership of DECIEM contributed approximately 6 percentage points to net sales growth.
Skin care, fragrance and hair care net sales grew strong double-digits in the region, while makeup net sales declined slightly.
ELC continued to invest in digital marketing, which drove strong double-digit online sales growth. Sales of the company’s products online represented 36% of sales for the fiscal year. Department stores, specialty multi and freestanding stores grew double digits as well.
In mainland China, net sales grew strong double digits led by continued strength in skin care, an uptick in fragrance growth and the trend toward recovery in makeup during the year. Nearly every brand grew, led by luxury brands, and sales increased double digits in every channel.
On August 20, 2020, ELC announced a two-year restructuring program, Post-COVID Business Acceleration Program, designed to resize their business against dramatic shifts in the wake of the Covid-19 pandemic. The Restructuring Program’s main areas of focus include accelerating the shift to online with the realignment of their distribution network reflecting freestanding store and certain department store closures, with a focus on North America and Europe, the Middle East & Africa; the reduction in brick-and-mortar point of sale employees and related support staff; and the redesign of the company’s regional branded marketing organizations, plus select opportunities in global brands and functions.
2021 Highlights
In February, Lauder paid $1 billion to increase its ownership in wildly popular, industry-disruptor, Canadian-based DECIEM to 76%, valuing the company at $2.2 billion. In three years, ELC plans to buy the rest of the company.
With industry growth in sales of skin care and a drop in color cosmetics, a day after announcing the DECIEM deal, ELC announced it would be closing Becca Cosmetics.
By 2025, ELC says 75-100% of its packaging will be recyclable, refillable, reusable, recycled or recoverable. Additionally, the company will increase the amount of post-consumer recycled material in its packaging by up to 50% in the same year.
In April, ELC announced it was shutting down operations for Rodin Olio Lusso.
In June, Clinique announced their new global brand ambassador, Melissa Barrera, a Mexican actress and singer and star of the film ‘In the Heights.’
Just last month, poet laureate extraordinaire Amanda Gorman was named Global Changemaker at Estée Lauder’s flagship brand—and will be featured in brand campaigns starting in 2022. She will also work with them on a corporate level to create Writing Change, helping to award $3 million in grants to promote literacy among girls and women — and access to equity and social change.
Looking Ahead
ELC plans to approve specific initiatives under the Restructuring Program through fiscal 2022 and expects to complete those initiatives through fiscal 2023, with savings of $400-$500 million, before taxes. They then plan to reinvest a portion in future growth initiatives.
When commenting on 2021 results, Freda emphasized, “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.”
For first quarter fiscal 2022, reported net sales are forecasted to increase between 17% and 19% versus the prior year period.
For full year fiscal 2022, reported net sales are forecasted to increase between 13% and 16% versus the prior year period. This is ahead of the company’s long-term goal of 6% to 8% as the business begins to normalize as it recovers from the impacts of Covid-19.
Read Next: Procter & Gamble is #4.
