Estée Lauder Companies reported net sales of USD 3.94 billion for the third quarter, up 5 percent, with the U.S. beauty firm noting an “ongoing softness” in overall prestige beauty in mainland China.
SEE ALSO: Estée Lauder Asia travel retail and mainland China sales still waning, plans to reduce workforce
For the three months ended March 31, Estée Lauder Companies Asia-Pacific sales returned to growth, up 3 percent, led by Hong Kong SAR, mainland China and Japan, reflecting growth in skin care and fragrance sales.
In Hong Kong, sales rose strong double digits, led by skin care, helped by an increase in traveling consumers, compared to the prior-year period. The increase also led to growth in the company’s freestanding stores that more than doubled.
Mainland China sales grew low single digits, due to strong double-digit growth in January 2024 compared to the prior-year period, which was affected by a rise in Covid-19 cases. The growth on the mainland was partially offset by the ongoing softness in overall prestige beauty, with the market fighting subdued consumer confidence and softness during holiday and key shopping moments.
Elsewhere, sales in Japan increased by double digits, led by double-digit growth in fragrance, thanks to domestic and traveling consumers, which fueled growth in nearly all channels of distribution, led by freestanding stores, the U.S. beauty firm added.
For the nine months ended March 31, the New York-based company reported sales of USD 11.74 billion, a 5 percent decrease. Organic net sales decreased 5 percent, driven by Asia travel retail and mainland China.
“For the third quarter of fiscal 2024, we delivered our organic sales outlook, exceeded expectations for profitability and continued to improve working capital,” said Fabrizio Freda, president and chief executive officer.
“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. Asia travel retail returned to organic sales growth, as developed and emerging markets across Asia/Pacific, EMEA, and Latin America further contributed.”
Earlier this year, the beauty giant said it plans to cut between 3 percent and 5 percent of its workforce as part of its new “restructuring program.”
Effective June 30, the reduction takes into account the elimination of some positions, as well as retraining and redeployment of certain employees in select areas, the company added.
The New York-based company said the restructuring is expected to yield annual gross benefits of between USD 350 million and USD 500 million.