The Estée Lauder Companies (ELC) have reported net sales of US$3.56 billion for Q1 – a 9 per cent drop from US$3.9 billion for the same period last year.
There’s a lot to be hopeful about, though. According to Fabrizio Freda, president and CEO: “We are pleased with the stronger than expected start to our fiscal year.”
Highlights include double-digit year-on-year growth in mainland China and Chinese domestic travel retail, primarily due to the increased number of duty-free shops in Hainan and higher purchase limits.
The Asia-Pacific region reported overall sales of US$1.149 billion for Q1 – up from US$1.058 billion for the same period in 2019.
Skincare remained strong with revenues climbing across all regions, led by the core Estée Lauder and La Mer brands. Total net sales for Q1 rose to US$2.035 billion – up from US$1.84 billion last year.
Cult franchises including Advanced Night Repair, Micro Essence and Perfectionist proved their worth for Estee Lauder. While La Mer’s double-digit upsurge – centred on China – was driven by the launch of the new The Concentrate.
Makeup sales were the most affected by Covid-19 restrictions in major markets, dropping to US$978 million for Q1 from US$1.443 billion for the same period in 2019.
Artisanal and niche fragrances from Kilian Paris, Le Labo and Editions de Parfums Frederic Malle enjoyed strong sales upticks in the Asia-Pacific region.
In spite of on-going lockdowns around the world, ELC is confident it can reach its long-term growth targets of 6 to 8 per cent as key markets recover. In the short term, the multinational predicts a sales decline of 3 to 5 per cent for its Q2.
Sue Nabi, Coty’s recently anointed CEO, is also upbeat, revealing that the multinational’s Q1 results met or exceeded expectations.
Net revenues for the period reached US$1.67 billion – a 13 per cent year-over-year decline.
“The success of recent launches, including Marc Jacobs Perfect, Gucci Bloom Profumo di Fiori, Sally Hansen’s Good.Kind.Pure and CoverGirl’s Clean Fresh, confirm the strength and enduring potential of our brand portfolio,” she said.
“As we have leaned into our digital efforts and activation, we have seen double-to-triple digit e-commerce sell-out growth across most markets, with our e-commerce penetration as a percentage of our overall sales doubling to 13 per cent.”