Estee Lauder sees sales soar in fourth quarter
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Estee Lauder sees sales soar in fourth quarter

Iconic make-up and skincare giant Estee Lauder posted upbeat earnings this week that saw sales rise – but missed analysts’ expectations on guidance. Despite boasting a history that stretches back to 1946, Estee has developed a huge following amongst millennial consumers. These relative youngsters, along with a surge in travel retail, and strong sales in all segments and geographies, are largely to thank for Estee’s strong showing in its fiscal fourth quarter.

Estee’s share price has risen by 7% so far this year

graph 2308 esteelauder

SOURCE: Yahoo Finance

Estee said that net sales climbed by 12% from the fourth quarter in the previous year to $3.3 billion, on a constant currency basis. That’s a small but significant beat against analysts’ expectations for net sales of $3.25 billion.

Broken into divisions, the increase looks like this: skincare sales rocketed by 26% to $1.38 billion, make-up sales increased by 2% to $1.36 billion, and fragrance and haircare sales rose by 9% and 6% respectively. All of these figures are reported in a year on year, constant currency basis.

Geographically, Estee said that sales in the U.S. rose by 2% to $1.2 billion; Europe, the Middle East and Africa (EMEA) saw sales rise by 16% to $1.4 billion, while sales in Asia Pacific increased by an impressive 23%.

The company also beat the Street on earnings, posting a figure of 61¢ per share – an easy win against consensus estimates of 56¢ per share.

The Estee story continued largely apace during the quarter: millennials continued to flock to the company’s trendy brands like Mac and Too Faced, and they were driven by Estee’s partnership YouTube vloggers and social media stars.

The only drag on an otherwise positive set of results was the company’s guidance, which came in below the Street’s expectations. Estee said that it expected full year earnings between $4.62 and $4.71 per share. That’s less that the hoped-for $4.99 per share. Estee also said it expects sales to rise by around 4% to 5%.

Disclosure

Dominion holds Estee Lauder in its Global Trends Luxury Fund.


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