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Beauty giant Estée Lauder today reported weak fiscal fourth quarter and full year results, driven by dipping North America sales and a slow recovery in its Asia travel retail business. The New York-based company reported a 1% rise in net sales in its fourth quarter, but a 10% drop in net sales in fiscal 2023.
In the fourth quarter, the beauty giant saw sales upticks in makeup, fragrance, and haircare, but a dip in skincare. Sales in the Americas were flat in fiscal 2023 as retailers in the US tightened inventory due to inflationary pressures. Many of the company’s skincare brands struggled in the Americas, offset by a strong performance by The Ordinary.
For the full year across all regions, skincare sales dropped 14%, particularly from declines in the Estée Lauder brand, La Mer, and Dr.Jart+, while Mac, The Ordinary, and Bobbi Brown performed well. In the makeup category, Mac and Clinique saw growth, while Estée Lauder, Tom Ford, and La Mer sales sank, leaving net sales flat in the category. Fragrance sales jumped 14% thanks to Tom Ford, Estée Lauder, and Le Labo, while hair care grew 6%, led by The Ordinary and Aveda.
For the 2024 fiscal first quarter, the company predicts net sales will sink 10% to 12% YoY, while it anticipates a net sales rise between 5% and 7% for the full year.
Skin in the game: Estée Lauder’s earnings contrast with a much sunnier performance from competitor L’Oréal, which reported 13.3% year over year sales growth for its first half last month. Unlike Estée Lauder’s sinking skincare sales, L’Oréal dermatological beauty grew 29%, thanks to brands like La Roche-Posay and CeraVe. L’Oréal, which has a strong position in mass cosmetics brands like Nyx and Maybelline, has also been beating Estée Lauder at its own game in the prestige cosmetics and personal care space, Bloomberg reported.