La Mer, Brazil

The Estée Lauder Cos. Inc. posted a significant jump in sales for both the fiscal fourth quarter and fiscal year.

For the year, Lauder posted nearly $13.7 billion in sales, up 16 percent from fiscal 2017. Net earnings were down 11 percent, due in part to restructuring charges. Diluted earnings per share were $2.95, down from $3.35 in the prior-year period.

For the fiscal fourth quarter, the business posted almost $3.9 billion in sales, up 14 percent from the prior-year quarter. Net earnings for the quarter were $188 million, down 18 percent.

Lauder noted that Leading Beauty Forward, its restructuring program, will now cost between $900 million and $950 million, as opposed to original projections of $600 million to $700 million. The business also expects the program, which has shifted funds toward digital and other initiatives, to contribute annual benefits between $350 million and $450 million — also higher than original projections.

“By investing in our hero franchises, fast-growing channels and digital and social media, we delivered double-digit sales and adjusted earnings per share growth,” Lauder president and chief executive officer Fabrizio Freda said in a statement. “We achieved record net sales in fiscal 2018 and one of our best performances in the last decade.

“Sales climbed in virtually all our brands and we hit milestones along the way. Among the top four brands, our flagship Estée Lauder brand achieved record global sales and grew 22 percent in constant currency, demonstrating the amazing equity of the brand. La Mer became the fourth brand in our portfolio to contribute well over $1 billion in net sales, and we increased sales at MAC and Clinique globally,” Freda continued.

“Product innovation and creativity were strong across brands and Leading Beauty Forward provided us the flexibility to invest more in digital advertising behind our initiatives, which is accelerating our sales growth,” Freda added.

In the fourth quarter, skin-care sales were up 26 percent to nearly $1.4 billion, due to growth in the Estée Lauder, La Mer and Clinique brands. Makeup sales grew 4 percent, to $1.36 billion, driven by the Lauder brands, Tom Ford, Too Faced, Becca and La Mer. MAC and Clinique’s performances negatively impacted makeup numbers. In fragrance, sales were up 11 percent to $403 million, driven by Jo Malone London, Tom Ford and Le Labo. Hair-care sales were up 8 percent to $151 million, driven by new launches from Aveda.

Looking forward, Lauder expects to grow above the industry’s projected 5 to 6 percent, and in 2019, will work to create products “that appeal to a more diverse and growing middle class around the world,” Freda said.

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