Designer fragrances Tom Ford Beauty and Jo Malone London drive The Estée Lauder Companies growth
04 Nov 2021 --- The Estée Lauder Companies (ELC) is reporting strong performance for fiscal 2022 first quarter with net sales of US$4.39 billion, an increase of 23% from US$3.56 billion in the prior-year period.
Net sales grew in every region, and product category, including Skincare and Makeup, and this reveals the recovery in brick-and-mortar retail stores, primarily in western markets. Organic net sales increased 18%.
The company reported net earnings of US$692 million, compared with net revenues of US$523 million in the prior-year period.
“We delivered an excellent performance to begin fiscal 2022, despite the increased volatility and variability globally during the quarter, by our multiple dynamic engines of growth strategy. Our growth engines increasingly diversified, as we expected,” says Fabrizio Freda, president and CEO of ELC.
“The Makeup unit, developed markets in the West, and brick-and-mortar reignited and complemented momentum in areas of Skin Care, Fragrance, mainland China, Travel retail in Asia/Pacific, and global online areas.”
Looking at ELC’s results in the Asia region, net sales growth primarily reflected increases in China and Korea.
The Fragrance and Skincare categories net sales grew double digits in the region, and Hair Care increased single digit. In mainland China, net sales grew double digits, led by Skincare and Fragrance. Sales also increased by double digits in nearly every channel.
Designer fragrances fuel growth
The Fragrance category had a 50% net sales growth. The net sales grew in every region and across virtually all brands that sell fragrances, driven by continued growth in luxury fragrances. Designer fragrances growth primarily reflected the timing of holiday shipments and easy comparisons in travel retail versus the prior year.
Net sales grew in every region and across virtually all brands that sell fragrances, driven by continued growth in luxury fragrances.
“The Fragrance category soared double-digits in every region, driven by Tom Ford Beauty and Jo Malone London. Our hero products performed exceptionally well, and our innovation catered to consumer demand.”
Tom Ford Beauty’s growth was fueled by-products such as the Private Blend, including Oud Wood and Lost Cherry, and Signature, including Black Orchid. The launch of Ombre Leather Parfum and accelerated growth in emerging markets also contributed to the development.
Makeup and Skincare categories thrived
Thirteen brands contributed double-digit organic sales growth versus the prior-year period, notes Freda. The Skincare and Makeup categories both had a 20% net sales growth.
Makeup net sales increased, and this was led by “Estée Lauder and MAC who drove the Makeup’s emerging renaissance, while La Mer and Clinique delivered stand-out results in Skincare.”
Estée Lauder achieved growth through the Double Wear and Futurist foundation product lines and the successful launches of Double Wear Sheer Long-Wear Foundation and Pure Color Whipped Matte Lip Color.
MAC’s growth reflected successful marketing campaigns to drive the makeup renaissance as COVID-19 restrictions subsided, particularly in face and eye products.
Regarding the “stand-out” results in Skincare, the strong double-digit growth from La Mer reflected the brand’s significant strength with Chinese consumers. Net sales growth was driven by increased hero products, including Crème de la Mer, The Moisturizing Soft Cream, and The Treatment Lotion.
The solid double-digit growth in the Skincare category from La Mer reflected the brand’s significant strength with Chinese consumers.
Additionally, the launch of The Hydrating Infused Emulsion and targeted expanded consumer reach, including the launch on a new online platform in Southeast Asia, also contributed to growth.
Social Impact and Sustainability Report
ELC also revealed its fiscal 2021 Social Impact and Sustainability Report that highlighted ELC’s progress toward global goals and new post-consumer recycled (PCR) and virgin plastic packaging targets.
In the fiscal year 2021, the company remained on track to achieve its social impact and sustainability goals while generating exceptional business results and navigating challenges related to the COVID-19 pandemic.
“Doubling down on our social impact and sustainability strategy is an important part of our goal to continue delivering long-term value,” adds Freda.
Across the business and within its brand portfolio, the company’s achievements over the last fiscal year include progress toward its Racial Equity and Gender Equality commitments, accomplishing its PCR material goal ahead of schedule, and setting additional packaging targets.
Additionally, The Estée Lauder Companies Charitable Foundation deepened its commitment to girls’ education and expanded its mission to include women’s advancement.
ELC’s previous sustainability efforts
Earlier this year, ELC partnered with Eastman, a specialty materials provider, announced a global memorandum of understanding to achieve its pledge that 75-100% of its packaging will be sustainable by 2025. Also, at Climate Week NYC, ELC discussed its efforts in tackling climate change.
In September, Roctool, a cool surface technology provider and ELC collaborated to provide eco-friendly packaging solutions for Clinique’s beauty bottles.
By Nicole Kerr
