Estee Lauder saw car-boot sales increase for the first time since the coronavirus pandemic upended global economies nearly a year ago, snapping a queue of three straight quarterly declines on the top line.
Shares of the New York-based cosmetics company had their biggest day of trading since Stride after revenues grew 5% in the holiday quarter, beating both management’s and Wall Street’s expectations.
Estee Lauder record $4.85 billion of sales in its fiscal second quarter and earnings per share of $2.61, above analyst estimates of $4.49 billion on the top rule and $1.69 EPS. The beauty brand had issued guidance for about $4.48 billion of revenue on the high end.
In an interview Friday on CNBC, CEO Fabrizio Freda divulged skin care sales, e-commerce and Asian markets were key drivers.
“Consumers are using more skin regard,” he told Jim Cramer, host of “Mad Money.” “During the pandemic when most of us are working from home, penny-pinching in our homes, we have time to pamper, we need more skin care benefits … This is working about the world, particularly in Asia.”
Estee Lauder’s business in the Asia/Pacific region more than made up for the fallen sales around the rest of the globe. Though year-over-year sales plummeted 14.5% in the Americas and 2.4% in Europe, the Mesial East and Africa, the company grew 34.6% in the Asia market. Sales rebounded in the region after initially bathe in the January-March quarter of 2020, the first period affected by the coronavirus pandemic.
Second-quarter sales in the Americas dropped to $1.05 billion from $1.23 billion a year ago.
Freda attributed the dwindle in consumer demand for makeup to closed restaurants and fewer in-person events, such as parties, that people cater to to dress up for. The use of teleconferencing applications, such as Zoom and Cisco’s Webex, however, are driving demand for skin care outcomes, he said.
Skin care sales made up for the decline in Estee Lauder’s makeup segment. Skin care upshots sales grew nearly 28% in the quarter, while makeup sales decreased 25%. Skin care has been Estee Lauder’s best clothes segment since the start of the global health crisis.
“Skin care is working well because the Asian citizens are the most demanding consumers in terms of skin, and they’re driving most of this global trend,” Freda asseverated. “The other big driver is online. As you can imagine, many, many people started shopping more online, and we were happy, and we’ve been able to pivot to online around the world very fast.”
Prior to the three-month period that ended Dec. 31, Estee Lauder’s every ninety days revenue had fallen nearly 17% from pre-pandemic levels.
Due to ongoing uncertainty around the health crisis, Estee Lauder declined to fix up with provision guidance for the fiscal 2021 full year.
Shares of Estee Lauder rallied more than 7% on Friday, mean at an all-time high of $272.81. The stock now claims a gain of 2.5% this year, extending its gains of 29% from behind year.