Estee Lauder reports lower-than-expected quarterly sales
U.S. based beauty giant Estee Lauder Companies reported lower-than-expected quarterly sales, hurt by less demand for Clinique and Estee Lauder skin care products and a stronger dollar.
For the three months ended June 30, 2015, the Company reported net sales of $2.52 billion, compared with $2.73 billion in the prior-year period. The fiscal 2014 fourth quarter included the effect of the accelerated retailer orders, which created an unfavorable comparison with the fiscal 2015 fourth-quarter results. Adjusting for the impact of the accelerated orders, net sales in constant currency for the three months ended June 30, 2015 would have increased 7%, in line with the Company’s expectations, and grew in each of the Company’s geographic regions and product categories, except skin care.
The Company’s fourth quarter sales benefited from innovative new products and growth in emerging and developed markets. The Company generated strong gains in the U.S., after adjusting for the accelerated orders, and constant currency double-digit gains in the U.K. Double-digit constant currency increases were generated in many European emerging markets, as well as in Asia/Pacific.
The Company reported net earnings of $153.0 million, compared with $257.7 million last year. Diluted net earnings per common share were $.40, compared with $.66 reported in the same prior-year period. Adjusting for the impact of the accelerated orders, diluted net earnings per common share in constant currency for the three months ended June 30, 2015 would have increased 4%.
For the year, the Company achieved net sales of $10.78 billion, a 2% decrease compared with $10.97 billion in the prior year. Net earnings for the year were $1.09 billion, compared with $1.20 billion last year, and diluted net earnings per common share were $2.82, compared with $3.06 reported in the prior year.
Fabrizio Freda, President and Chief Executive Officer, said, “Together with our powerful brand portfolio and financial discipline we finished our fiscal year with a strong fourth quarter, generating 7% constant currency sales growth, after adjusting for the accelerated sales orders we reported in fiscal 2014. One of the great strengths of our Company is our ability to successfully execute our well-defined strategy. This was clearly evident in fiscal 2015 as we once again delivered strong results despite considerable macroeconomic headwinds and challenges. For the full year, our adjusted 6% local currency sales growth met our expectations, and we exceeded our earnings per share forecast.
“Our sales grew at a faster rate than global prestige beauty, due to the success of our multiple engines of growth. Standout performances generated double-digit sales gains in most of our makeup and luxury brands and the online, specialty-multi and freestanding store channels. By geography, emerging markets, the United Kingdom and accelerated growth in certain developed markets were also key performance drivers. We strengthened and diversified our portfolio with the acquisition of four uniquely positioned brands in fast-growing areas of prestige beauty.
“In fiscal 2016, we expect constant currency net sales growth of 6% to 8% and double-digit earnings per share growth, after adjusting for the accelerated sales orders.”