Double-digit sales growth in travel retail has contributed to a healthy second quarter performance for The Estée Lauder Companies.

The group posted a +17% year-on-year increase in net sales, to US$3.74 billion. Net earnings were US$123 million.

In travel retail, double-digit sales growth was generated across most brands, led by Estée Lauder, Tom Ford, MAC, Jo Malone and La Mer. A rise in global airline passenger traffic, particularly by Chinese travellers, new launch initiatives and targeted expanded consumer reach contributed to the sales gains, the company said.

The Estée Lauder Companies President and Chief Executive Officer Fabrizio Freda said: “In our second quarter we continued our strong momentum and generated stellar results. In constant currency, our sales grew +14%, led by exceptional strength in travel retail, global online and Asia, along with strong double-digit growth in several markets in Europe, including Italy and Benelux.

“We delivered double-digit sales gains across most product categories and many brands, including Estée Lauder, luxury brands and most mid-sized brands.

“In the holiday season, our brands achieved outstanding results from their e-commerce businesses, and customisable gift options were significant contributors. These elements, along with our accelerating cost saving efforts and our progress executing our Leading Beauty Forward initiatives, resulted in an impressive adjusted +23% earnings per share growth in constant currency.

The Estée Lauder Companies President and Chief Executive Officer Fabrizio Freda said an ‘exceptional’ travel retail performance contributed to stellar Q2 results

“Our strong results, combined with future benefits we expect from the passage of the new Tax Cuts and Jobs Act, further enhance our ability to strategically invest in faster-growing areas of prestige beauty to attract new consumers. Our strategy is sound and effective, and we have the brands, resources and talent to continue above-industry growth in our second half and full fiscal year.

“In constant currency, our sales grew +14%, led by exceptional strength in travel retail” – Fabrizio Freda

“We have confidence in our outlook and are raising our full-year constant currency sales growth forecast to between +10% and +11% and increasing our constant currency earnings per share growth estimate, to +19% to +20%, before restructuring charges and the impact of one-time tax act items.”

Net sales and operating income in the company’s major product categories were favourably impacted by a weaker US Dollar in relation to most currencies. Total operating income in constant currency, before charges, increased +14%.

Performance by product category


  • Net sales increased sharply, with exceptional double-digit gains from Estée Lauder, La Mer, Origins and GLAMGLOW, and strong growth from Clinique.
  • The Estée Lauder brand grew globally, particularly in China and travel retail, due largely to the continued success of the recently launched Advanced Night Repair Eye Concentrate Matrix and gains in other Advanced Night Repair products.
  • La Mer was driven by the success of new products in its Genaissance collection, the launch of The Moisturizing Matte Lotion, gains from existing products, and targeted expanded consumer reach.
  • Origins generated sales growth in every region, particularly Asia, as well as in travel retail due to “the continued success of several product lines in the facial mask and moisturiser sub-categories”. Sales gains from GLAMGLOW reflected additional product assortments and targeted expanded consumer reach. Clinique’s sales gains reflected increases in the brand’s Moisture Surge product line.
  • Increases were partially offset by lower skincare sales from Aveda.
  • Operating income increased sharply, primarily from the company’s heritage brands and La Mer, reflecting higher sales.


  • Strong sales growth in make-up was primarily driven by incremental sales from the company’s fiscal 2017 second quarter acquisitions of Too Faced and BECCA. Tom Ford and Estée Lauder recorded strong double-digit increases and MAC achieved higher make-up sales.
  • Lauder attributed the higher sales from MAC to strong growth in Asia Pacific, particularly China and Hong Kong, and in travel retail.
  • These increases were partially offset by lower make-up sales in the USA.
  • Make-up operating income was flat. Growth from Clinique, Estée Lauder and MAC was primarily due to higher sales. Lower results were reported primarily from Too Faced, reflecting additional investments behind targeted expanded consumer reach internationally, and from Smashbox.


  • Strong double-digit rises from luxury brands and Estée Lauder boosted net sales
  • Jo Malone delivered ‘outstanding’ double-digit growth in travel retail and generated sales increases in every region. This reflected strong growth from existing fragrances, targeted expanded consumer reach and the recent launch of the English Oak fragrances.
  • Increased sales from Tom Ford were partly down to the continued success of the Private Blend line of fragrances.
  • Le Labo, By Kilian and Editions de Parfums Frédéric Malle each benefitted from growth in existing products and new launches and targeted expanded consumer reach, Lauder noted.
  • Higher fragrance sales from Estée Lauder were driven by the “timing of and strong demand for holiday gift sets”.
  • Certain designer fragrances recorded lower sales.
  • Fragrance operating income increased sharply, reflecting higher sales from Jo Malone, Estée Lauder and Tom Ford.


  • A rise in sales reflected gains from Aveda and Bumble and bumble.
  • Salon channel and freestanding Aveda store sales were soft.
  • Haircare operating income increased, reflecting higher sales and disciplined expense management.

Net sales and operating income outside the USA were favourably impacted by a weaker US Dollar in relation to most currencies, said Lauder.

Performance by region

The Americas

  • Sales in North America benefited from incremental sales from the acquisitions of Too Faced and BECCA.
  • La Mer generated strong double-digit sales gains in skincare. Skincare and fragrance drove solid Estée Lauder sales.
  • Sales in the company’s online and specialty-multi channels grew strong double-digits.
  • Sales decreases, primarily attributable to the decline in retail traffic in some US brick-and-mortar stores, were recorded in several brands.
  • On a reported basis, sales in Canada and Latin America increased double-digits. In constant currency, sales in Canada rose mid-single digits and Latin America grew high-single digits.
  • Operating income in the Americas increased, primarily reflecting higher operating results from certain heritage brands as well as disciplined expense management. Partially offsetting the higher results were lower results from MAC, Tom Ford and certain designer fragrances, due to a decrease in sales.

Europe, the Middle East & Africa

  • The company generated strong sales growth in the region both on a reported basis and in constant currency. Contributing to the growth was strong double-digit sales gains in travel retail, Italy, Benelux and India, and strong increases in several emerging markets such as Russia and Turkey. Foreign currency translation increased reported sales by +5%, with the largest impact from the UK and Italy.
  • As noted, travel retail sales rose by double digits. This was led by growth in global airline passenger traffic, new launch initiatives and targeted expanded consumer reach.
  • Lower sales were posted in the Middle East, driven by retailer inventory rebalancing. In constant currency, Germany and Switzerland recorded softer sales.
  • Operating income increased, primarily due to strong double-digit operating results in travel retail. Certain developed and emerging markets also contributed to the higher profits, said Lauder. The gains were partially offset by lower results in the UK, Germany and France.

Asia Pacific

  • On a reported basis and in constant currency, sales increased sharply, led by robust double-digit growth in China, Hong Kong and Thailand, and strong gains in Taiwan and Japan.
  • The higher sales in China reflected strong double-digit gains in every brand except designer fragrances. Estée Lauder, MAC, La Mer, Tom Ford and Jo Malone led the sales growth. The company generated double-digit sales growth in every channel, particularly in department stores and online.
  • The sales increase in Hong Kong reflected solid domestic growth and a rise in tourism. Most brands generated strong double-digit growth, primarily Estée Lauder, La Mer, MAC and Tom Ford.
  • In Asia Pacific, operating income increased significantly, primarily due to improved results in China, Hong Kong, Thailand and Taiwan driven by higher sales.

Six-month results

For the six months ended 31 December 2017, the company reported net sales of US$7.02 billion, a +16% year-on-year increase. Net earnings were US$550 million.