Estee Lauder noticed sales improve for the primary time for the reason that coronavirus pandemic upended world economies almost a 12 months in the past, snapping a string of three straight quarterly declines on the highest line.
Shares of the New York-based cosmetics company had their largest day of buying and selling since March after revenues grew 5% within the vacation quarter, beating each administration’s and Wall Street’s expectations.
Estee Lauder reported $4.85 billion of sales in its fiscal second quarter and earnings per share of $2.61, above analyst estimates of $4.49 billion on the highest line and $1.69 EPS. The magnificence model had issued steering for about $4.48 billion of income on the excessive finish.
In an interview Friday on CNBC, CEO Fabrizio Freda stated skincare sales, e-commerce and Asian markets had been key drivers.
“Consumers are using more skin care,” he informed Jim Cramer, host of “Mad Money.” “During the pandemic when most of us are working from home, closed in our homes, we have time to pamper, we need more skin care benefits … This is working around the world, particularly in Asia.”
Estee Lauder’s enterprise within the Asia/Pacific area greater than made up for the misplaced sales round the remaining of the globe. Though year-over-year sales plummeted 14.5% within the Americas and a pair of.4% in Europe, the Middle East and Africa, the company grew 34.6% within the Asia market. Sales rebounded within the area after initially dipping within the January-March quarter of 2020, the primary interval affected by the coronavirus pandemic.
Second-quarter sales within the Americas dropped to $1.05 billion from $1.23 billion a 12 months in the past.
Freda attributed the decline in client demand for make-up to closed eating places and fewer in-person occasions, similar to events, that folks have a tendency to decorate up for. The use of teleconferencing purposes, similar to Zoom and Cisco‘s Webex, nevertheless, are driving demand for skincare merchandise, he stated.
Skin care sales made up for the decline in Estee Lauder’s make-up phase. Skin care merchandise sales grew almost 28% within the quarter, whereas make-up sales decreased 25%. Skin care has been Estee Lauder’s greatest phase for the reason that begin of the worldwide well being disaster.
“Skin care is working well because the Asian populations are the most demanding consumers in terms of skin, and they’re driving most of this global trend,” Freda stated. “The other big driver is online. As you can imagine, many, many people started shopping more online, and we were ready, and we’ve been able to pivot to online around the world very fast.”
Prior to the three-month interval that ended Dec. 31, Estee Lauder’s quarterly income had fallen almost 17% from pre-pandemic ranges.
Due to ongoing uncertainty across the well being disaster, Estee Lauder declined to supply steering for the fiscal 2021 full 12 months.
Shares of Estee Lauder rallied greater than 7% on Friday, closing at an all-time excessive of $272.81. The inventory now claims a acquire of 2.5% this 12 months, extending its good points of 29% from final 12 months.