Too Faced

Bolstered by gains in e-commerce and acquisitions, the Estée Lauder Cos. posted 5 percent sales growth for its fiscal year.

For the full year, Lauder brought in $11.82 billion in net sales, up from $11.26 billion in the prior-year period. Net earnings were $1.25 billion, up 12 percent, compared to $1.11 billion in the prior year. Too Faced and Becca, which Lauder acquired in 2016, contributed 2 percent to sales growth. Online sales were also strong in Asia and the Americas.

For the year, skin care posted a 2 percent sales increase with $4.5 billion, compared with $4.4 billion in 2016. Makeup had a 7 percent increase in sales, up to $5.1 billion, from $4.7 billion in 2016. Fragrance sales increased 10 percent, to $1.6 billion from almost $1.5 billion. Hair care sales dipped 3 percent, to $539 million from $554 million in 2016.

Skin care gains were driven by La Mer and the Estée Lauder brand, plus launches from Glamglow. Bobbi Brown, Origins and Aveda also posted skin-care gains, offset by lower sales from Clinique.

Too Faced and Becca drove sales in makeup, which also saw double-digit gains from Tom Ford in every region, plus double-digit increases from Smashbox, La Mer and Estée Lauder. Tom Ford’s makeup sales were driven by its lip colors, including the Tom Ford Soleil Color Collection. La Mer’s sales were driven by the SkinColor Collection, and Estée Lauder’s sales were boosted by the Double Wear and Pure Color lines. MAC sales grew internationally, but both MAC and Clinique color continue to struggle in the U.S.

In fragrance, Jo Malone London, Tom Ford and Le Labo posted double-digit sales gains. Hair care figures faced a difficult prior-year comparison, Lauder said, noting 2016 launches.

“These results reflect our success in pivoting our business to the fastest-growing areas of prestige beauty to align with consumers’ changing shopping preferences,” said Fabrizio Freda, chief executive officer. “With our leading brands, quality innovations and the acquisition of two makeup brands, we attracted new consumers globally. Our business accelerated in our online direct-to-consumer and retailer e-commerce sites, as well as in the travel retail and specialty-multi channels, and we built momentum in key geographies, like China and Italy, aided by enhanced digital and social media communications.”

Freda noted the business expects its momentum to continue through 2018. “We are well-positioned to deliver strong profitable growth as we deploy our prestige brand portfolio to new consumers globally through our hero product franchises and robust new product pipeline, new digital-first marketing approach, and focused expansion for our smaller to mid-sized brands,” he said.

Lauder recorded $212 million of restructuring and other charges in connection with its Leading Beauty Forward program.

The group is projecting sales growth of between 8 percent and 9 percent for fiscal 2018, with Too Faced and Becca expected to bring in about 2 percent of that growth.

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