Today, The Estée Lauder Companies Inc. reported a slight decline in net sales for the fiscal year ended June 30, 2024, totaling $15.61 billion, down 2% from the previous year’s $15.91 billion. This decrease was primarily driven by persistent softness in the prestige beauty sector in mainland China and reduced sales in Asia travel retail. These declines were partially offset by growth in markets such as Hong Kong SAR, Europe, the Middle East, Africa (EMEA), Japan, and Latin America.
In response to the challenging environment, particularly in China, CEO Fabrizio Freda outlined a strategic focus for fiscal 2025, emphasizing share gains in a promising long-term market and improved performance across both developed and emerging regions. Key initiatives include reinvigorating Skin Care, leveraging high-end Fragrance, enhancing precision marketing, and accelerating innovation. Despite a challenging year, the company aims to balance regional growth and enhance profitability, aiming for better performance in fiscal 2026.
Skin Care saw a 3% to $7.9 billion, decreasing in net sales, largely due to ongoing issues in mainland China and a global travel retail decline. However, excluding these declines, net sales grew 3%. Brands such as Estée Lauder, Clinique, and Dr.Jart+ faced declines, while La Mer and The Ordinary reported growth, with notable gains from hero products and new innovations.
Makeup net sales recorded $4.47 billion, decreasing by 1%, influenced by global travel retail challenges and previous benefits from loyalty programs. Despite this, growth was seen in EMEA, Latin America, and Asia/Pacific, with Clinique showing significant regional gains.
Fragrance sales recorded $2.49 billion, increasing by 2%, driven by strong performance from Luxury Brands like Le Labo and Jo Malone London. However, Estée Lauder’s fragrance segment struggled due to lower retail sales and Asia travel retail pressures.
Hair Care experienced a 4% decline with net sales of $629 million, primarily due to softness in the salon and direct-to-consumer channels, impacting Aveda in North America.
Specifically in regions, The Americas net sales was $4.58 billion. In Latin America, the company saw significant growth, with net sales increasing in nearly every market and product category. Mexico led this growth with double-digit increases, particularly in the Makeup category, driven by strategic activations and new product launches. Brazil also contributed to the region’s success, experiencing high-single-digit growth, with Makeup and Fragrance performing strongly, supported by advertising and promotional activities.
In contrast, North America’s net sales remained flat. The region experienced a decline in the Makeup category, partially due to the previous year’s benefit from changes in M·A·C’s loyalty program. However, this was somewhat offset by high-single-digit growth in Fragrance, particularly among the company’s Luxury Brands. Additionally, there was double-digit growth in specialty-multi channels and an online sales boost from Clinique’s launch on Amazon’s U.S. Premium Beauty store, though these gains were counterbalanced by declines in other channels, particularly department stores.
In the Europe, Middle East, and Africa (EMEA) region, net sales was $6.14 billion, decreased by 2%, primarily due to challenges in Asia travel retail. Despite this, many markets within the region saw growth, with Skin Care, Makeup, and luxury fragrance brands driving low-single-digit increases. The travel retail sector faced a high-single-digit decline due to inventory resets and lower conversion rates, although a return to growth in the second half of the fiscal year provided some relief.
The Asia/Pacific region was $4.89 billion, saw a 3% decrease in net sales, largely impacted by continued softness in mainland China’s prestige beauty market. However, there were bright spots, with Hong Kong SAR and Japan experiencing double-digit growth. In Hong Kong, the increase in travel boosted sales in Skin Care, Fragrance, and Makeup, while in Japan, strong demand for Fragrance among both domestic and traveling consumers led to double-digit growth across nearly all distribution channels.
