The Estée Lauder Companies Inc reported net sales of USD 15.91 billion for its fiscal year ended June 30, a decrease of 10 percent from USD 17.74 billion in the prior year, with organic sales hurt by the cosmetic giant’s Asia travel retail segment in both Hainan and Korea.
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For fiscal 2023, the New York-based company said organic net sales fell 6 percent, primarily driven by Asia travel retail in Hainan and Korea, partially offset by growth in nearly every market in both Asia Pacific, and Europe, the Middle East and Africa.
In Asia Pacific, net sales increased 4 percent, with growth increasing to 36 percent in the fourth quarter from 7 percent in the third quarter, reflecting double-digit growth in most markets and increases in every product category as markets recovered from eased Covid-related restrictions compared to the prior year.
Also contributing to the rise in net sales were successful brand activations, new product launches and the strategic focus on luxury fragrance and skin care, said Estée Lauder.
Moreover, Hong Kong and Macau, mainland China, Australia and Japan led net sales growth in the region.
During the twelve months, net sales in mainland China increased, returning to strong growth in the second half of fiscal 2023 after low retail traffic as a result of Covid-related restrictions, with the rise in Covid cases challenging the business in the first half of fiscal 2023.
By brand, double-digit net sales growth from La Mer, M.A.C, Jo Malone London and Tom Ford, drove net sales growth in the region, as did strong growth from fragrance brand, Le Labo.
“We returned to organic sales growth in the fourth quarter, delivering our outlook. Momentum continued in the markets of EMEA and Latin America, and accelerated strongly in Asia/Pacific led by mainland China and Hong Kong,” said Fabrizio Freda, president and chief executive officer.
“For full-year fiscal 2023, we delivered organic sales growth and prestige beauty share gains in many developed and emerging markets, but Asia travel retail pressured results, particularly in skin care, and we continued to experience softness in North America. Fragrance excelled, up double digits in every region, and makeup improved sequentially to double-digit growth in the fourth quarter as more markets emerged into the post-pandemic era.”