Travel retail shows double-digit growth as The Estée Lauder Companies reports strong Q1 results

The Estée Lauder Companies today posted a strong first-quarter performance with net sales rising +23% year-on-year to US$4.39 billion for the period ended 30 September. Organic net sales increased +18%.

Global travel retail sales increased by double digits. This reflected continued growth in Asia Pacific despite a surge in COVID-19 cases that led to increased travel restrictions there during much of the first quarter of fiscal 2022, as well as the partial return of summer holiday travel in Europe, the Middle East & Africa and the Americas.

Groupwide sales grew in every region and product category, reflecting the recovery in brick-and-mortar retail stores, primarily in western markets, the company said.

President and Chief Executive Officer Fabrizio Freda said, “We delivered excellent performance to begin fiscal 2022, despite the increased volatility and variability globally during the quarter, by virtue of our dynamic multiple engines of growth strategy.

“Our growth engines increasingly diversified, as we expected. Makeup, developed markets in the West, and brick-and-mortar reignited and complemented momentum in skincare, fragrance, Mainland China, travel retail in Asia Pacific, and global online. Impressively, relative to the pre-pandemic first quarter of fiscal 2020, the overall business is much bigger and more profitable.

The company reported net earnings of US$692 million, up +32% compared US$523 million in the prior-year period. Diluted net earnings per common share reached US$1.88, compared with US$1.42 iin the prior-year period.

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“Thirteen brands contributed double-digit organic sales growth versus the prior-year period, demonstrating the breadth of strength across our portfolio,” said Freda. “Estée Lauder and M·A·C drove makeup’s emerging renaissance, while La Mer and Clinique delivered stand-out results in skincare. Fragrance soared double-digits in every region, driven by Tom Ford Beauty and Jo Malone London. Our hero products performed exceptionally well and our innovation proved, once more, to uniquely capture consumer desires.

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“For fiscal 2022, we continue to expect strong net sales and adjusted earnings per share growth with margin expansion. Our confidence in the long-term growth opportunities for global prestige beauty and our company is reflected in the announcement today to raise the quarterly dividend.”

Freda concluded, “Today, we will release our Fiscal 2021 Social Impact and Sustainability Report. We are incredibly inspired by the achievements of our employees around the world in realizing great progress towards our social impact and sustainability commitments and goals.”

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