Europe still Estée Lauder’s market for strong growth thanks to demand and new launches

By Andrew MCDOUGALL

- Last updated on GMT

Europe still Estée Lauder’s market for strong growth thanks to demand and new launches

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New launches, strong local demand and continued tourist traffic in Europe, the Middle East and Africa have continued to boost Estée Lauder’s results for the second quarter running maintaining the region’s key position for the company at a challenging time.

As reported earlier this month​, net sales for the second quarter were $3.12 billion, up 8% in constant currency; and once again, the strongest geographic performance came from the Europe​, Middle East and Africa region.

According to its results, net sales in EMEA rose 13% in constant currency, with double-digit growth in virtually every market, thanks to a continuation of strong local demand for its products, increased tourist traffic in certain cities, selective brand distribution expansion, and new launches.

‘Not over-reliant’

This was particularly important as some markets around the world continued to decline for the company, so results in Europe and other strong markets helped to cushion this blow.

“We are not over-reliant of any one category, channel or country, which helped cushion us somewhat from regional slowdowns or political strife,”​ said Fabrizio Freda, President and CEO.

“In travel retail, we accelerated our brand expansion into Europe, which enjoyed stronger traffic ​[from] tourists.”

“Seeing a growing demand in our direct-to-consumer business, we accelerated development of e-commerce sites and freestanding stores in several markets,”​ he said on a conference call.

Strength

All-in-all, investing in its strengths has helped to fuel momentum in a number of regions and categories, helping to generate stronger results in the company’s make-up and luxury brands, direct-to-consumer channels and the Europe, Middle East and Africa region, where it gained significant share.

“Even with formidable competition, we believe we are expanding our leading position in skin care and make-up combined in Western Europe and in emerging markets in that region,”​ adds Freda.

Dissecting the European performance further, beauty brands Bumble and bumble and Smashbox had good growth in the Boots retailer, whilst in another retailer, Douglas, which accounts for a third of Estée Lauder’s business in Germany, sales grew double digits in the quarter.

There has also been success in higher-end department stores globally, although in mid-tier North America department stores, some brands are experiencing softness, although they showed solid increases online.

Estée Lauder's New Dimension serum was also successful in many markets in Europe and Asia, according to Freda, offsetting lower than expected results in North America.

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