Estee Lauder posts model results as it ploughs ahead with restructuring plans

 
Helen Cahill
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Instagram star Kendall Jenner models for Estee Lauder (Source: Getty)

Estee Lauder strutted its stuff today with a strong set of results, posting its fourth consecutive quarterly sales increase.


The figures

Estee Lauder's sales jumped 4.8 per cent in the quarter, with sales in the company's make up arm climbing 10.2 per cent to $1.13bn (£0.86bn).

Net income dropped to $93.5m (£71.46m) - down by 25 cents per share - in the quarter ending 30 June. In the equivalent quarter last year, net income stood at $153m (£116.93).

Why it's interesting

The sales rise was driven, in part, by strong demand for the company's M.A.C and Bobbi Brown brands, aimed at younger consumers, with the more traditional Estee Lauder and Clinique lines proving less popular in America.

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The strong results also come at a time of restructuring - the company predicts costs of between $80m and $100m (£61.16m - 76.45m) as it plans to exit certain markets and reduce its global workforce.

​What Estee Lauder said

Fabrizio Freda, chief executive of Estee Lauder, 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 capitalised on shifting consumer preferences by leveraging our strength in makeup and positioning our company to win in luxury fragrances."

What analysts said

Ildiko Szalai, analyst at Euromonitor International, said: "Traditionally, Estée Lauder has been too reliant on its core regional markets of North America and Western Europe. More recently, the company has expanded to other regional markets including Asia Pacific, Latin America and the Middle East and Africa.

"In Asia Pacific, Estée Lauder’s primary focus is China skin care, in which it recorded robust growth. A key concern for Estée Lauder in premium colour cosmetics is that its key markets, North America and Western Europe, have reached near saturation point, and it is faced with the challenge of having to stimulate sales in these markets since they account for the lion’s share of its global colour cosmetics sales."

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