Estée Lauder reports net sales increase in sales, led by UK market

The Estée Lauder Companies has published its results for the second quarter ending 31 December 2021, reporting net sales of £4.1 billion, an increase of 14% (£3.6 billion) compared to the same period in 2020.

The group said that net sales grew in every region and product category, with makeup and fragrance growing by double digits. It said the growth was a reflection of the early stages of recovery in primarily western markets' brick-and-mortar retail stores, as well as strength in online channels.

In the skincare segment net sales grew in every region, led by strong double-digit sales growth from La Mer and Clinique. Haircare net sales also rose, reflecting increases from both Aveda and Bumble and bumble. In the fragrance segment net sales grew in every region and across virtually all brands, with Jo Malone London reporting double digit growth. In combination all segments reported net sales growth beyond pre-pandemic levels.

In the makeup category net sales grew by double digits, with growth led by Estée Lauder, MAC, Too Faced, Tom Ford Beauty and Smashbox, although it remained the only category that did not improve on pre-pandemic levels.

Total reported operating income reached £1.05 billion, a 33% increase from £782 million in the year prior. Adjusted operating income in constant currency increased by 21%, primarily reflecting higher net sales.

Estée Lauder also reported double digit growth in brick-and-mortar sales, driven by the United Kingdom, whilst online sales declined slightly.

The company confirmed that the COVID-19 pandemic continued to disrupt its operating environment, impacting retail traffic in the second quarter of 2022. It added that globally, in areas where stores were open, consumer traffic had not recovered to the pre-pandemic levels.

Fabrizio Freda, President and Chief Executive Officer said, “We achieved record sales and profitability in the second quarter of fiscal 2022, empowered by the timeless desirability of our brands and despite accelerated volatility and variability, as well as supply chain challenges, from the pandemic. Every category, region and major channel expanded, showcasing the strength of our multiple engines of growth strategy.

“As we embark on the second half of fiscal 2022, our business is far bigger and more profitable than pre-pandemic with every region larger. This reinforces our confidence in our ability to navigate the impacts of the prolonged pandemic. We are raising our fiscal 2022 full year outlook, as we reflect our outstanding results to-date and are mindful of the risks of continued volatility and disruption in the second half of the year.”