NEW YORK — The Estée Lauder Cos. Inc. is making the most of slowing growth in the global prestige beauty market.
The beauty giant bested first-quarter profit expectations, but trimmed back the high end of its annual sales projection as weakness in Europe and South Korea weigh on the overall market. The company said sales would grow by 6 percent to 7 percent in local currencies this year. In August, Lauder said sales would grow 6 percent to 8 percent.
Fabrizio Freda, president and chief executive officer, told WWD Thursday that the global prestige market would expand a “reasonable” 3 percent this year, down from growth of 4 percent to 5 percent over the last couple of years. Lauder continues to expect to grow at twice the rate of the overall market, with strength in the U.S. as well as China, where the firm is branching out into secondary and tertiary markets.
Southern Europe, which is digging out of a debt crisis, continues to be the major thorn in the side of prestige. Freda said the overall market is slowing in Italy, Spain, Switzerland, Greece, Portugal and France, and that Lauder is fighting back.
“In the south of Europe we are selectively investing in some of our winning brands and innovation in order to build market share,” Freda said. “We are growing in almost all of these markets…which means we are building market share.” The ceo predicted the Southern Europe prestige market would begin to grow again in 2014 and 2015.
In the U.S., Freda said the prestige market was welcoming in mass customers, who are trading up to take advantage of higher quality products and better service.
“If you go into a MAC store, you are 99.8 percent sure that you will get a great foundation shade,” the ceo said. “If you are shopping in the supermarket alone, it will be much more difficult to get the right shade.”
First-quarter profits attributable to Lauder increased 7.5 percent to $299.5 million, or 76 cents a diluted share, from $278.6 million, or 70 cents. Adjusted profits of 79 cents a share came in 2 cents ahead of the analysts’ consensus estimate of 77 cents.
Net sales for the quarter ended Sept. 30 rose 2.9 percent to $2.55 billion from $2.48 billion a year earlier.
Lauder now projects full-year earnings per share of $2.47 to $2.56, a slightly narrower range compared with the $2.44 to $2.56 previously forecast.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews