Estée Lauder US color cosmetics sales save the day!

By Michelle Yeomans

- Last updated on GMT

Related tags Cosmetics

Estée Lauder US color cosmetics sales save the day!
Despite a drop in demand for Estée Lauder’s heritage brands, US sales were on the up; thanks to new product introductions, holiday sets and expanded distribution in the company’s make-up and luxury categories.

The global cosmetics giant attributes the decrease in heritage brand sales in the United States to, in part, a difficult comparison with the prior-year period, which featured significant launches of reformulated iconic products.

Overall, operating income in the Americas decreased, primarily reflecting increased costs behind capability-building initiatives, such as R&D and IT, as well as lower results in Latin America, primarily Venezuela.

However, this was partially offset by higher results from makeup artist, hair care and luxury brands.

Net sales for the three months ending December 31, 2014, for the Americas were up by 21% from $1,194.6 in 2013, to $1,201.4. Net sales for the make-up category accounted for $1,176.2.

In constant currency, sales grew in Canada and Latin America, while reported sales decreased, due to the impact of foreign currency translation. 

'Strong growth' in make-up artist brands

According to Estée Lauder's second quarter results, higher color cosmetics sales primarily reflected strong growth from the company's make-up artist brands and recent launches, such as 'Pure Color Envy' sculpting lipstick and 'Perfectionist makeup'.

New product offerings, as well as expanded distribution in a number of channels, including freestanding stores, seen double-digit growth from the likes of Smashbox and the Tom Ford.

Goal is to improve heritage brands, emerging markets and high-growth channels

According to president and chief executive officer, Fabrizio Freda; the second half of the fiscal year was successful due to acquiring Editions de Parfums, Frédéric Malle and GLAMGLOW.

"These brands, along with RODIN olio lusso and Le Labo, which we purchased last quarter, complement our portfolio in skin care and luxury fragrance and further strengthen our long-term strategic growth plan​," he said in a company call.

Freda also noted that plans going forward will be to accelerate a strong innovation pipeline and current product successes, improve trends in large heritage brands, emerging markets and high-growth channels and brands.

"With the agility we have created, we will continue to strategically invest in growth opportunities, even in the face of softness and challenges in certain markets​," he concludes. 

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