Estée Lauder Companies has reported strong results for the final quarter of fiscal 2016 and the year as a whole. Net sales reached US$2.65 billion for the three months ended June 30, up 5 percent on the same quarter in 2015, to bring full-year sales to US$11.26 billion – a rise of 4 percent on the previous year. When adjusted to account for currency fluctuations, sales grew an impressive 7 percent for both periods.
Fabrizio Freda, President and Chief Executive Officer, said, “Our fiscal 2016 performance gives us much to celebrate. We again delivered strong constant currency net sales growth and double-digit adjusted constant currency EPS growth, reflecting the compelling products and services we bring to consumers around the world. We capitalized on shifting consumer preferences by leveraging our strength in makeup and positioning our company to win in luxury fragrances. We nimbly allocated resources and made strategic investments in areas that gave us terrific results, including emerging markets, our make-up category, and the online and specialty-multi retail channels. Importantly, we achieved these results against a backdrop of social and political instability, currency volatility and economic challenges.”
Breaking down the results by category, all sectors exhibited growth for the year with the exception of skin care, where the negative impact of foreign currency translation saw sales drop 3 percent overall despite double-digit gains from Le Mer and a strong performance from Origins. The make-up category, however, remained buoyant, with 8 percent growth, boosted by stellar performances from Tom Ford, MAC and Smashbox. Fragrance and hair care saw sales jump 3 percent and 4 percent respectively.
Net earnings were down in the final quarter, at just US$93.5 million for 4Q2016, compared to US$153.0 million last year due to restructuring costs related to ELC’s global technology infrastructure and Leading Beauty Forward initiatives, but overall the company saw net earnings inch up 2 percent for the year to US$1.11 billion with net earnings per share growing 5 percent to US$2.96.
Freda vowed to deliver the same again for fiscal 2017, pegging net sales growth in constant currency terms at between 6 and 8 percent, “In fiscal 2017, we will aggressively pursue new opportunities to enhance our leadership position. We will continue to diversify our distribution toward the fastest growing channels, while further developing our mid-sized brands and the newest additions to our portfolio. With our Leading Beauty Forward initiative, we are laying the foundation for future growth by lowering our cost base, increasing our agility and investing behind our strengths and improving our go-to-market capabilities.”
