Estee Lauder Asia Pacific sales rose 24 per cent in the latest quarter – a stark contrast to the cosmetics giant’s US performance, where revenue fell 6 per cent.
Global net sales increased 11 per cent to US$3.9 billion, or by 12 per cent on a constant-currency basis. Net earnings rose 19 per cent to $595 million
But the company has cautioned that the ongoing Hong Kong protests and the stronger US dollar will impact on the current quarter.
Estee Lauder said sales in Hong Kong fell 20 per cent in the first quarter, but given they account for just 4 per cent of global sales, the impact so far is muted.
CEO Fabrizio Freda told analysts on an earnings call that Hong Kong “has been difficult” and as yet no improvement is evident.
The economic gloom in Greater China, fuelled by trade tensions and the appreciating Renminbi, is also worrying Estee Lauder.
“Given the fact that there are global macro slowdowns, even though we haven’t, in fact, seen it in China and haven’t seen it affect our Asia business in general … it certainly could happen,” said CFO Tracey Travis, quoted by Reuters.
Freda said in a statement that sales growth was led by excellent results from international markets – particularly China – and other emerging markets. The skin-care category, travel retail and online channels globally, the flagship Estee Lauder brand and several luxury brands, all grew by double-digit rates.
“In addition, all four of our biggest brands, each with annual sales well over $1 billion, grew globally. This demonstrates the enduring consumer interest in established brands and their proven, desirable products.”