The Estee Lauder Companies saw shares soar 12 percent on the back of a strong set of results for the first quarter of fiscal 2019.
The US prestige beauty manufacturer reported a sales rise of 8 percent to US$3.52 billion for the three months ended September 30, 2018. Skin care put in the strongest performance in terms of product categories, with sales up 17 percent (reported) to US$1,486 million, while on a geographic basis, Asia-Pacific was the fastest growing region, with sales up 24 percent to US$855 million while strong growth in the emerging markets of India and the Middle East offset lower net sales in the UK for an overall sales rise of 14 percent for Europe, the Middle East & Africa.
“Our fiscal year is off to an excellent start,” said Fabrizio Freda, President and Chief Executive Officer. Our sales and earnings per share grew double digits, reflecting multiple engines of global growth throughout our product categories, brands, regions and channels. Our creative innovations and high-quality products resonated strongly. We attracted new consumers and increased engagement with existing ones through successful digital advertising and influencer activities.
“Our top growth drivers were skin care globally, the Asia/Pacific region and emerging markets, the global online and travel retail channels, and most brands, including Estée Lauder, MAC, La Mer, Tom Ford and Origins. In addition, in the United States, excluding Bon-Ton closures, our performance among department stores turned positive.”
Freda added, “We are operating in a challenging macro environment with many economic and geopolitical risks, but we are confident in the strength of our business strategy, the quality of our products, the desirability of our brands and our ability to execute with discipline and agility. With our strong first-quarter results and exciting upcoming launches and programs, we are raising our EPS guidance for the year.”
The company forecast growth ahead of the industry for the year, with the global prestige beauty market predicted to grow 5 to 6 percent over fiscal 2019. However, it also warned that geopolitical tensions, regulatory matters as and global security issues continued to affect consumer spending in some countries.