The Estée Lauder Cos. is sticking with its department store partners in the U.S. and abroad, executives said at the company’s shareholder meeting Tuesday.
“Department stores’ online sales are growing nicely,” Lauder chief executive officer Fabrizio Freda said, adding that while foot traffic is still slow in the U.S. department stores, department stores in other regions — like Selfridges — still do very well. Plus, Lauder’s recent move further into the specialty retail space is making up for softness in U.S. department stores, he said.
Freda and other executives, including Lauder chief financial officer Tracey Travis and executive chairman William Lauder, addressed the company’s shareholders from the Essex House in New York, going over the company’s latest financials and pivot toward areas of growth.
For its first fiscal quarter, Lauder reported a 45 percent year-over-year net earnings increase and 14 percent net sales jump for the first fiscal quarter of 2018. Net sales were up to $3.27 billion, driven in part by Lauder’s acquisitions of Too Faced and Becca, which it bought in 2016. Net earnings were $427 million, and diluted net earnings per common share increased 44 percent to $1.14.
“One of the keys to our success was pivoting our business to high-growth opportunities,” Freda said.
He also outlined the company’s growth in e-commerce (which is now about 11 percent of sales), and travel retail, which Freda said he expected to make up about 20 percent of prestige beauty sales within the next decade. Lauder is also planning to open 100 additional freestanding brand doors in fiscal 2018, he said.
The team answered a wide range of shareholder questions — from a seating shortage to Bitcoin to ingredients — toward the end of the meeting. Lauder clarified that while it hasn’t used parabens specifically for a while, it does use other preservatives, but pays specific attention to ingredient regulations.
“We are trying to create the very best, healthiest and safest products that are also effective for all of our customers around the world,” Lauder said.