BEAUTY: ESTÉE LAUDER – RESULTS
Estée Lauder turns in ‘performance of the decade’ in fiscal 2018
Estée Lauder reported ‘one of its best performances in the last decade’ for its fourth quarter and fiscal year which ended 30 June, 2018, with travel retail contributing ‘strong growth’ according to President and Chief Executive Officer, Fabrizio Freda. Charlotte Turner reports.
region and product category and gained global share. “By investing in our hero
franchises, fast-growing channels and digital and social media, we delivered double-digit sales and adjusted earnings per share growth,” he said. “We achieved record net sales in fiscal 2018 and one of our best performances in the last decade.” Sales climbed in ‘virtually all
Above: The Estée Lauder brand registered ‘record global sales’.
E
stée Lauder Companies registered an increase of 16% in net sales to $13.68bn in fiscal
2018, prompting Fabrizio Freda, President and Chief Executive Officer to describe it as an ‘outstanding year for the company’. During fiscal 2018, ELC reportedly generated higher sales in every
“By investing in our hero franchises, fast-growing channels and digital and social media, we delivered double-digit sales and adjusted earnings per share growth.”
Fabrizio Freda,
President and Chief Executive Officer, Estée Lauder Companies
brands’ and ELC said it hit milestones along the way. Among the top four brands, the flagship Estée Lauder brand registered record global sales and grew 22% in constant currency. La Mer became the fourth brand in
the ELC portfolio to contribute well over $1bn in net sales, while ELC said it also increased sales for MAC and Clinique globally. “Product innovation and creativity
were strong across brands and ‘Leading Beauty Forward’ [see panel below] provided us the flexibility to invest more in digital advertising behind our initiatives, which is accelerating our sales growth,” added Freda. For the three months ended 30
June, 2018, the company reported net sales of $3.3bn, a 14% increase compared with $2.89bn in the prior- year period. Net sales generated in this quarter increased in several developed
Leading Beauty Forward
As reported, in May 2016, the company announced a multi-year initiative called Leading Beauty Forward to build on its strengths and ‘better leverage its cost structure’ to free resources for investment to continue its growth momentum. Leading Beauty Forward is designed to
enhance the company’s ‘go-to-market’ capabilities, reinforce its leadership in
108 TRBUSINESS
global prestige beauty and continue creating sustainable value. Explaining the reasoning behind this major move, Fabrizio Freda, President and CEO said: “Leading Beauty Forward should
further position us better to continue winning on a complex global stage and generate savings to help sustain our long-term sales growth and margin progress.”
OCTOBER 2018
and emerging markets, reflecting especially strong growth from the travel retail, online and specialty- multi channels. Staying with the travel retail
performance, skincare was a stand- out segment, registering double- digit growth. The Estée Lauder, La Mer and Clinique brands were the largest contributors. Group-wide,
operating
income increased primarily from Estée Lauder and La Mer, with the strongest growth in China and travel retail. ELC’s fragrance operating results
improved in the final fiscal quarter, reflecting higher net sales from Tom Ford, primarily in North America, as well as the Europe, Middle East & Africa region, which again benefited from strong growth in travel retail. “In fiscal 2019, we will continue
to create products that appeal to a more diverse and growing middle class around the world and we are confident that we can continue to achieve industry-leading sales and double-digit earnings per share growth,” added Freda. “With a successful strategy that
focuses on multiple engines of growth across products, geographies, channels and demographics, we expect to once again gain share globally in fiscal 2019.” «
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