NEW YORK — Fragrance is coming into focus at the Estée Lauder Cos. Inc., which beat first-quarter profit expectations with a modest gain and drove currency-adjusted sales up 6 percent.
The company has a slate of new scents — including Estée Lauder Modern Muse, Zegna Uomo, Michael Kors Sexy Amber and Tory Burch — as well as a long-term plan to expand its fragrance business, which can help bolster other categories.
First, those fragrances, and all of the Lauder empire, will have to contend with what’s expected to be a very competitive holiday season.
“We expect the promotional level in the market to be high,” Fabrizio Freda, president and chief executive officer, told WWD. “We have seen it already…and I believe it will stay high across the holiday season. The consumer is a bit volatile and so a lot depends on how they feel about the economy and how they feel about their government…and how they feel about the specific opportunities for buying what they find in the market.”
Freda said traffic was soft in July and August, but “very solid” in September.
“What we expect is a solid holiday season for cosmetics,” he said, “but a bit more promotional and with consumers paying a lot of attention to high-quality innovation.”
The ceo said Lauder would build on its fragrance business for “many years to come” and that the category was a “very big opportunity,” particularly in Europe, Latin America, the Middle East and China.
“We are not in the business of only building fine fragrances,” he said. “We are in the business of [helping] consumers fragrance themselves in the way they want, respecting their culture.”
For instance, Freda noted that Japanese consumers use very few spray fragrances, favoring body products or shower gels. That’s just the opposite in the Middle East, where he said customers are “spraying pretty aggressively.”
Lauder’s net profits for the quarter increased 0.4 percent to $300.7 million from $299.5 million a year earlier. Earnings per diluted share were flat at 76 cents and came in 3 cents ahead of the 73 cents analysts predicted.
Net sales for the three months ended Sept. 30 increased 4.9 percent to $2.68 billion from $2.55 billion. Fragrance sales rose 5.7 percent to $367.4 million in the quarter.
Lauder continues to project sales growth of 6 percent to 8 percent in local currency this year — double the company’s estimate for the whole global prestige beauty market. The firm also tightened its annual earnings projections and is now projecting EPS of $2.80 to $2.87, up from $2.74 to $2.87.
The beauty giant boosted its quarterly dividend to 20 cents a share, up from 18 cents.
Lauder’s shares fell 0.6 percent on the New York Stock Exchange to close at $70.96 on Thursday.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast