Aug 23, 2021
Estée Lauder sees stronger than expected recovery in fourth quarter
Aug 23, 2021
American beauty group Estée Lauder's revenues exceeded expectations between April and June, benefitting from recovering cosmetics sales amid the gradual relaxation of Covid-19-related restrictions. However, the company remains cautious in the face of the spread of the Delta variant.
The company's net sales totaled $3.93 billion in the fourth quarter ended June 30, 2021, beating the $3.75 billion expected by analysts and representing a 62% rise compared to the same period in the previous year.
The group saw particular growth in the Americas and the EMEA (Europe, Middle East and Africa) region thanks to a gradual slow-down in Covid-19 infections and the prospect of a return to social activities, which were unexpectedly interrupted last year.
Revenues in Estée Lauder's skincare segment rose 47% in the quarter compared to the prior-year period, while its makeup segment saw a 76% increase.
Diluted net earnings per share were $0.78, also beating analysts' expectations of $0.50. Estée Lauder's shares were up 0.76% before trading.
For the full fiscal year, Estée Lauder achieved revenue of $16.2 billion, compared to $14.3 billion in the previous year.
"Our success [...] gives us confidence for the new year, as volatility and variability from Covid-19 are likely to persist for some time to come," commented the group's CEO, Fabrizio Freda, in a release.
The Delta variant has now spread to most corners of the world, leading to fears regarding renewed restrictions on movement, despite progress with vaccination campaigns.
Outlining the trends continuing to define its business during the pandemic, the company explained, "the demand for makeup continues to be weak compared to the pre-Covid-19 pandemic period, given fewer makeup usage occasions and ongoing mask wearing, while skin care, fragrance and hair care have been more resilient."
Over the course of the fourth quarter, Estée Lauder had to deal with temporary store closures in the UK, continental Europe and the Asia-Pacific region.
Looking forward, the group currently expects earnings per share to total between $7.04 and $7.26 in the fiscal year starting July 2021, guidance which is in line with analysts' expectations of $7.14.
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