The US-based beauty giant has published results exceeding analysts’ expectations in the third quarter of its 2024 fiscal year. However, the group maintained annual sales drop expectations despite return to growth in Asia.
The Estée Lauder Companies reported net sales of USD 3.94 billion for its third quarter ended March 31, 2024, an increase of 5% from USD 3.75 billion in the prior-year period.
On a comparable basis, net earnings per common share increased to USD .97, compared to USD .47 last year. Analysts had anticipated USD .50.
“For the third quarter of fiscal 2024, we delivered our organic sales outlook, exceeded expectations for profitability and continued to improve working capital. La Mer, Estée Lauder, Jo Malone London, Le Labo, and The Ordinary led organic sales growth, driven by beloved hero products and highly sought innovation,” said Fabrizio Freda, President and Chief Executive Officer in a statement.
Organic net sales increased 6% primarily due to double-digit growth (+12%) in Europe, the Middle East & Africa and “stronger sales” in Asia travel retail.
In the previous quarter, the group recorded a 10% decline in its turnover, due to a slower than expected recovery in Asia, and especially in China.
The fiscal 2024 third quarter impact of business disruptions in Israel and other parts of the Middle East was $.01 dilutive to reported and adjusted net earnings per common share.
Despite these better results, the group nevertheless reports “ongoing macroeconomic headwinds”, including “continued softness” in overall prestige beauty in mainland China, and geopolitical volatility in some areas around the world. The group therefore forecasts annual organic sales would fall 1% to 2%, compared with its previous estimate of a 1% decrease to a 1% increase.
