05.01.24
The Estée Lauder Companies (ELC) reported net sales of $3.94 billion for the third quarter that ended on March 31, 2024. Net sales increased in nearly all product categories, led by high-single-digit growth in the skincare category. Organic net sales increased by 6% mostly due to double-digit growth in Europe, the Middle East & Africa (“EMEA”), and strong sales in Asia travel retail.
Fabrizio Freda, President and Chief Executive Officer of ELC said:
“For the third quarter of fiscal 2024, we delivered our organic sales outlook, exceeded expectations for profitability, and continued to improve working capital… Asia travel retail returned to organic sales growth, as developed and emerging markets across Asia/Pacific, EMEA, and Latin America further contributed.”
Net sales increased 12% in Europe and the EMEA, primarily due to the Company’s travel retail business, reflecting double-digit growth in skincare and makeup categories.
Net sales increased 3%, led by Hong Kong SAR, mainland China, and Japan, reflecting growth in skincare and fragrance categories. Growth in Asia retail was driven by higher shipments reflecting a significant improvement in retail sales trends and continued progress in achieving target inventory levels.
Makeup net sales increased by 4%, primarily from growth in the Company’s travel retail business, and strong double-digit growth in Latin America and Korea. Estée Lauder’s Double Wear franchise contributed to brand growth across all regions. Clinique also contributed to double-digit growth with success in the eye, face, and lip subcategories.
Fragrance net sales grew 1% due to the success of Jo Malone London and Le Labo brands. Both fragrance brands expanded this quarter. Jo Malone London launched the Red Hibiscus cologne, and Le Labo expanded its global consumer outreach.
Hair Care net sales decreased 4%, primarily due to Aveda reflecting softness in the Company’s North American salon channel.
Freda concluded:
“With our third quarter results and fourth quarter outlook, we are confident that the second half of fiscal 2024 will prove to be an inflection point for our Company performance. We expect accelerating momentum in organic sales growth in the fourth quarter, and for operating margin in the second half of fiscal 2024 to not only be stronger than the first half but also to expand from the year-ago period.”
Fabrizio Freda, President and Chief Executive Officer of ELC said:
“For the third quarter of fiscal 2024, we delivered our organic sales outlook, exceeded expectations for profitability, and continued to improve working capital… Asia travel retail returned to organic sales growth, as developed and emerging markets across Asia/Pacific, EMEA, and Latin America further contributed.”
Results by Region
Sales in the Americas increased, mostly due to strong double-digit growth in Mexico and Brazil in the makeup category. North America’s sales growth was also driven by Clinique’s launch in the U.S. Amazon Premium Beauty store.Net sales increased 12% in Europe and the EMEA, primarily due to the Company’s travel retail business, reflecting double-digit growth in skincare and makeup categories.
Net sales increased 3%, led by Hong Kong SAR, mainland China, and Japan, reflecting growth in skincare and fragrance categories. Growth in Asia retail was driven by higher shipments reflecting a significant improvement in retail sales trends and continued progress in achieving target inventory levels.
Results by Category
Skincare net sales increased 9%, due to growth in every geographic region. The La Mer brand contributed to double-digit growth in EMEA and Asia/Pacific due to the success of the new product innovation—The Moisturizing Fresh Cream. The Estée Lauer brand increased in sales due to the new Re-Nutriv Ultimate Diamond Transformative Brilliance Soft Creme Moisturizer, primarily selling in mainland China.Makeup net sales increased by 4%, primarily from growth in the Company’s travel retail business, and strong double-digit growth in Latin America and Korea. Estée Lauder’s Double Wear franchise contributed to brand growth across all regions. Clinique also contributed to double-digit growth with success in the eye, face, and lip subcategories.
Fragrance net sales grew 1% due to the success of Jo Malone London and Le Labo brands. Both fragrance brands expanded this quarter. Jo Malone London launched the Red Hibiscus cologne, and Le Labo expanded its global consumer outreach.
Hair Care net sales decreased 4%, primarily due to Aveda reflecting softness in the Company’s North American salon channel.
Freda concluded:
“With our third quarter results and fourth quarter outlook, we are confident that the second half of fiscal 2024 will prove to be an inflection point for our Company performance. We expect accelerating momentum in organic sales growth in the fourth quarter, and for operating margin in the second half of fiscal 2024 to not only be stronger than the first half but also to expand from the year-ago period.”
