Sales at the Estée Lauder Cos. Inc. rose 17 percent during the company’s second fiscal quarter.
The company had $3.74 billion in net sales for the quarter, the robust growth driven by the company’s acquisitions of Becca and Too Faced. Earnings were $123 million, down from the prior-year’s $428 million, reflecting a one-time charge of $394 million related to the U.S. Tax Cuts and Jobs Act that was signed in December. Diluted earnings per share were 33 cents.
Lauder president and chief executive officer Fabrizio Freda cited strength in travel retail, online sales and international markets, especially Asia and some European regions.
“Our strong results, combined with future benefits we expect from the passage of the new Tax Cuts and Jobs Act, further enhance our ability to strategically invest in faster-growing areas of prestige beauty to attract new consumers,” Freda said. “We have confidence in our outlook and are raising our full-year constant currency sales growth forecast to between 10 percent and 11 percent and increasing our constant currency earnings per share growth estimate, to 19 percent to 20 percent, before restructuring charges and the impact of one-time tax act items.”
In line with the overall prestige market, Lauder’s skin-care sales gained the most, posting 20 percent gains from the prior-year period with $1.49 billion in sales. Makeup sales were up 16 percent to $1.5 billion; fragrance sales 14 percent to $565 million; and hair care 5 percent to $144 million.
In skin care, Estée Lauder, La Mer, Oirgins, Glamglow and Clinique posted double-digit gains. Makeup sales were driven by Too Faced, Becca, Tom Ford, Estée Lauder and MAC, which continues to gain internationally but struggle in the U.S. Luxury sales, including Jo Malone and Tom Ford, helped grow the fragrance division. Hair-care gains were driven by Aveda and Bumble and bumble.