The luxury consumer has at least one true believer.
Fabrizio Freda, president and chief executive officer of the Estée Lauder Cos. Inc., said that even though the well-heeled aren’t spending like its 2006 or 2007, they have regained their verve.
That plays right into Lauder’s sweet spot in the prestige market, where a bet that more advertising would rouse shoppers paid off with a stronger-than-expected 35.8 percent rise in first-quarter profits.
“The luxury consumer is back to normal,” the ceo told WWD. “They are not anymore in panic mode. They are going back to normal behaviors. They still pay a lot of attention to value and their choices.”
Lauder is also seeing mass-market shoppers trade up.
“In some of these new launches, like Clinique Even Better Clinical [Dark Spot Corrector], where we have customer data, where we know who is buying the product, we know that consumers who previously were buying in mass are now purchasing Clinique for the first time,” Freda said.
The brand has been promoted though a multipronged ad campaign including print, digital, TV and public relations efforts. Although the company is investing more in advertising, total advertising and promotional spending has not increased relative to sales. Instead the funds are shifting away from gifts and samples.
Freda is relatively bullish on the holiday season, but sounded a note of caution that continued high unemployment could weigh on business in early 2011.
Earnings attributable to the beauty firm shot up to $191.1 million, or 95 cents a diluted share, from $140.7 million, or 71 cents, a year earlier. Sales for the quarter ended Sept. 30 rose 14.1 percent to $2.09 billion from $1.83 billion.
Adjusted profits of 97 cents a share came in 20 cents ahead of analyst estimates.
For the full year, Lauder boosted profit projections to $2.90 to $3.10 a share, up from the $2.62 to $2.90 predicted in August.
Investors liked what they saw and sent Lauder’s stock up $6.76, or 10.5 percent, to $71.17. Shares hit a new 52-week high of $74.31 in intraday trading before coming off their peak.
It appears that Lauder played its cards better than Avon Products Inc. and Revlon Inc., both of which fell short of quarterly profit expectations last week and partially blamed increased investments in advertising.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)