Strong holiday sales and a weak dollar boosted the Estée Lauder Cos. Inc.’s profits by 34 percent in the second quarter. Now Estée Lauder is on a mission to encourage luxury consumers to keep on shopping with an increased advertising effort.
“The luxury consumer is again eager to shop, but is choosy about what she buys,” president and chief executive officer Fabrizio Freda told Wall Street analysts during an earnings call Thursday.
“In the second half of our fiscal year, we planned to invest additional resources in global advertising, particularly across digital media,” said Freda. “We will focus on our most promising new initiatives and biggest launches to pull consumers to our counters.”
To that end, the Clinique brand introduced half as many products in the fall compared with a year ago. But, according to Estée Lauder, those products generated nearly 50 percent more in sales, driven largely by the introduction of Clinique Even Better Clinical Dark Spot Corrector, which is now the brand’s top-selling item.
One of the major channels of focus for the company is digital, which Estée Lauder is integrating into its service model. At select Clinique counters, customers can use iPads to receive skin care assessments and then e-mail themselves a customized regimen.
The planned increase in advertising spending will be directed across the company’s biggest brands and regions, said Freda. He emphasized Estée Lauder will continue to invest in magazines and plans to increase advertising in TV for select brands, including Clinique, Estée Lauder, Aramis and Designer Fragrances. Freda said Estée Lauder is not moving away from gift-with-purchase as a promotional tool, but noted, “The frequency of gwp has decreased for some brands, and in some markets we’ve been more aggressive than others. It’s a gradual reduction.”
Estée Lauder’s fewer but better approach helped the beauty firm easily beat Wall Street estimates in the second quarter. For the three months ended Dec. 31, net income was $343.9 million, or $1.71 a diluted share, from $256.2 million, or $1.28, in the year-ago period. Sales gained 10.2 percent to $2.49 billion from $2.26 billion last year.
For the first half of the year, net income gained 34.8 percent to $535 million, or $2.67 a diluted share, from $396.9 million, or $1.99, in the year-ago period. Sales gained 11.9 percent to $4.58 billion, from $4.1 billion from last year. Estée Lauder raised its full-year guidance to a range of $3.40 to $3.60 diluted earnings a share, as well as increased the firm’s operating target to between 13 percent and 14 percent.
Skin care, a strategic focus for the company, was the star category in the quarter with sales up 14 percent to $1.03 billion. Freda, citing data from The NPD Group, said the company’s products accounted for 21 of the top 25 skin care items in U.S. department stores during the recent three-month period.
Fragrance staged a comeback of sorts, gaining 11 percent to $447.6 million.
In yet another fashion show shuffle, @elleryland is moving its show in sync with the Paris couture calendar — though the brand is still keeping one foot on the city’s ready-to-wear schedule. Their runway show in January will coincide with the launch of a new strategy: designing two main collections each year instead of four, which will then be released in four drops. “As we all know, the system needs to change. We need to show sooner to give time back to artisans and designers to do what they do best — create,” said founder Kym Ellery. #wwdnews #wwdfashion (📷: @kukukuba)
@maxmara’s classic 101801 coat was the cornerstone of its pre-fall 2018 collection. The design team expanded the traditional double-breasted, kimono-sleeved style into a trapeze coat, lean belted styles and a peacoat and presented them in monochromatic looks – like the camel one pictured here. #wwdfashion #prefall18 (📷: George Chinsee)
The @cfda has shifted the dates of #NYFW, with Men’s showing on February 5 through February 7, and Women’s will directly follow, running from February 8 through 14. The preliminary schedule will be released on the CFDA’s web site in the next few days, but Mark Beckham, VP of marketing for the CFDA, revealed that @rafsimons will be back to close the men’s-specific part of the week with a show on February 7 #wwdfashion (📷: Kelly Taub)
@ferragamo is introducing a new space dedicated to the development of women’s and men’s leather good samples. The laboratory, which is created eco-friendly materials and designed to reduce the environmental impact of the manufacturing processes, will allow the company to expand its accessories offering through traditional artisanal approaches. #wwdfashion (📷: @aitorrosasphoto)
How does a “regular, degular, schmegular” girl from the Bronx, N.Y., become a Grammy-nominated artist with a certified platinum record in less than a year? Call it the @iamcardib come up. The 25-year-old has become a musical sensation, and the fashion world is taking note. “If I could describe her style I would say drama. She’s really into the dramatics,” says Cardi B’s stylist @kollincarter. See how Carter styles her bold and out there looks with the link in bio. #wwdfashion
“There is no formula. There is no guideline. I can watch Ted Talks all day, but there is no one who can advise me on exactly what it is I should be doing,” said @ronniefieg, CEO of @kith, in an interview with WWD’s @ariahughes at the brand’s new SoHo office in Manhattan. Head to WWD.com to see how Fieg went from hanging out in shoe stockrooms at 13 to building his own business. #wwdfashion (📷: @weston.wells)
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion