Estee Lauder Asia has recorded its third largest quarterly growth rate in 20 years, the parent company announced overnight.
While headline growth was affected by the adoption of new accounting standards, Estee Lauder said Asia-Pacific sales rose by a “strong double-digit” rate on a reported basis and at constant currency.
“The growth was broad-based, with most markets growing double digits. China and Japan accelerated while Hong Kong continued its strong growth,” the company said in a statement.
“[We] generated double-digit net sales growth in virtually every major product category and channel.”
Operating income for Estee Lauder Asia increased, primarily due to higher net sales, “as well as cost benefits associated with favorable channel mix and better leverage of fixed costs”.
Globally, Estee Lauder achieved net sales of US$3.52 billion in the three months to September, an 8 per cent increase compared with $3.27 billion in the prior-year quarter. The Company posted net sales growth in nearly all product categories, geographic regions and channels. Excluding the impact of currency translation and the adoption of the new revenue recognition accounting standard (ASC 606), net sales increased 11 per cent.
Net earnings rose 17 per cent to $500 million, compared with $427 million last year.
President and CEO Fabrizio Freda said described the quarter as “an excellent start” to the new financial year.
“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.”
He said the main drivers of the company’s sales growth were skin care globally, the Estee Lauder Asia-Pacific region and emerging markets, global online and travel retail channels, and most brands, including Estee Lauder, Mac, La Mer, Tom Ford and Origins.
“In addition, in the US, excluding Bon-Ton closures, our performance among department stores turned positive.
“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,” said Freda.