Benefitting from double digit sales gains in its online and travel retail channels, among others, the Estee Lauder Companies delivered “an outstanding financial performance in our fiscal 2018 first quarter,” said Fabrizio Freda, ELC President and Chief Executive Officer, commenting on the latest earnings results released on Nov. 1.
The Company achieved net sales of $3.27 billion, an increase of 14%, compared with $2.87 billion in the prior-year quarter in the quarter ended September 30, 2017.
Incremental sales from the Company’s recent acquisitions of Too Faced and BECCA contributed approximately 4 percentage points of the reported sales growth. Net earnings rose 45% to $427 million, compared with $294 million last
year. Diluted net earnings per common share increased 44% to $1.14, compared with $.79 reported in the prior year.
The fiscal 2018 first quarter also includes the impact of the adoption of a new accounting pronounce-ment for share-based compensa-tion, which added $.06 to diluted earnings per share.
Freda said that the outstanding performance demonstrated “the power of our diverse brand port-folio to leverage our multiple en-gines of growth.
Building on the global momentum of the last fiscal year, we benefitted from a continued acceleration in China, Hong Kong, travel retail and global online, strength in several developed and emerging markets in Europe, and incremental sales from Too Faced and BECCA.”
In travel retail, double-digit sales growth was generated across most brands, led by Estée Lauder, Tom Ford, Jo Malone and La Mer. Growth in global airline passenger traffic, particularly by Chinese travelers, solid new launch initi-atives, and targeted expanded consumer reach each contributed to the sales gains.
In addition to the online and travel retail growth, most luxury and mid-sized brands also posted double-digit sales gains, said Freda, who says ELC also saw signs of improvement in some U.S. prestige
department stores, and its targeted expansion into more specialty-multi doors to reach new consumers.
Sales growth in the Estée Lauder brand also continued to accelerate, generating double-digit gains in the quarter, he said.
Net sales and operating income in most of the Company’s geographic regions were favorably impacted by a weaker U.S. dollar in relation to most currencies.
For the full fiscal year, the company forecast reflects “strong programs supported by focused advertising and marketing spending and sustained investments to further build capabilities for the long term.
With this strong start to fiscal 2018 and our confidence in the potential for our business, we are raising our full-year constant currency sales growth forecast to between 8% and 9% and increasing our constant currency earnings per share growth estimate, before restructuring charges, to 12% to 14%.”
ELC says that global prestige beauty remains vibrant and is estimated to grow approximately 4% to 5% during the year. The Company’s annual growth has consistently outpaced global prestige beauty and is expected to grow approximately four percentage points ahead of the industry for fiscal 2018.