The Estée Lauder Companies Reports Fiscal 2021 Third Quarter Results
The Estée Lauder Companies Inc. (NYSE: EL) today reported net sales of
The Company reported net earnings of
Fabrizio Freda, President and Chief Executive Officer said, “We exceeded our sales and earnings expectations, even as several markets experienced increasing pressure from COVID-19 throughout the quarter. Our growth engines of Skin Care and Fragrance were incredibly powerful. Sales rose in every region, led by double-digit growth in Asia/Pacific, where many markets contributed and sales growth in mainland China accelerated. Online thrived as a growth engine, with sales having increased strong double-digits around the world, and Travel Retail excelled. Estée Lauder, La Mer, Jo Malone London, Clinique, and Tom Ford Beauty led the robust performance of many brands in our portfolio.
Our fiscal year-to-date sales and adjusted operating margin exceed that of the same period in fiscal 2019, as we continue to successfully navigate the challenges of the pandemic. With strong cash flow generation, we resumed share repurchases in the third quarter. We are thrilled to have agreed to increase our ownership in DECIEM, becoming majority owners with a path to full ownership in three years. DECIEM’s soaring brand The Ordinary and new brand incubation capability further enhance our superior multiple engines of growth strategy.”
Freda emphasized “We have achieved these outstanding results while, first and foremost, caring for the safety and well-being of our employees and consumers amid the pandemic. Impressively, we are investing in many compelling long-term growth drivers, including end-to-end innovation with a new center in Shanghai, state of the art manufacturing in Asia/Pacific, global online, and consumer analytics. We are progressing on our environmental goals and acting on our social commitments with urgency. We expect the momentum in our sales growth to build in the fourth quarter of fiscal 2021, not only from easing comparisons but also fundamental strength, as we drive recovery.”
COVID-19 Update
The COVID-19 pandemic continued to disrupt the Company’s operating environment, temporarily impacting retail traffic and certain consumer preferences in the third quarter of fiscal 2021. The resurgence of COVID-19 cases in several countries, particularly in Western Europe and Latin America, led to government restrictions to prevent further spread of the virus. These restrictions included the temporary closure of businesses deemed non-essential, curtailment of travel, social distancing and quarantines.
Retail Impact
While most brick-and-mortar retail stores that sell the Company’s products, whether operated by the Company or its customers, were open during the third quarter of fiscal 2021, most notably in China and the United States, there were intermittent closures throughout the rest of the world. In the United Kingdom, Japan, Canada, Italy, Spain, France, Mexico and Brazil, in particular, many retail stores were temporarily closed for some period during the quarter due to the resurgence of COVID-19 cases. Globally, in areas where stores were open, consumer traffic was significantly reduced as compared to the pre-COVID-19 pandemic period. In addition, while domestic travel in China, especially in Hainan, and some other travel corridors in Asia/Pacific, most notably Korea, were open, international travel has remained largely curtailed globally due to both government restrictions and consumer health concerns that continue to adversely impact consumer traffic in most travel retail locations.
Consumer Preferences
The COVID-19 pandemic-related closures of offices, retail stores and other businesses and the significant decline in social gatherings have also influenced consumer preferences and practices. Specifically, the demand for makeup continues to be weak given fewer makeup usage occasions while other categories have been more resilient.
Cost Controls
In response to the ongoing impacts from the COVID-19 pandemic, the Company continues to implement cost control actions in certain areas of the business to effectively manage the changing business environment.
Fiscal 2021 Third Quarter Results
Adjusted diluted earnings (loss) per share excludes restructuring and other charges and adjustments as detailed in the following table.
Reconciliation between GAAP and Non-GAAP (Unaudited) |
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Three Months Ended March 31, 2021 |
Three Months Ended
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Net Sales |
Diluted Earnings (Loss)
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Diluted EPS |
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% Change |
%
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% Change |
%
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2021 |
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2020(2) |
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As Reported Results (1) |
16 |
% |
13 |
% |
100 |
+% |
100 |
+% |
$ |
1.24 |
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$ |
(.02 |
) |
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Restructuring and other charges |
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.31 |
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.05 |
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Changes in fair value of contingent consideration |
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— |
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(.01 |
) |
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Goodwill, other intangible and long-lived asset impairments |
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.07 |
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.83 |
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Non-GAAP |
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13 |
% |
92 |
% |
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$ |
1.62 |
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$ |
.85 |
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Impact of foreign currency on earnings per share |
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(.03 |
) |
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Non-GAAP, constant currency earnings per share |
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88 |
% |
$ |
1.59 |
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(1)Represents GAAP, except Constant Currency percentages |
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(2)For the three months ended March 31, 2020 the effects of potentially dilutive stock options, performance share units, and restricted stock units of approximately 5.9 million, were excluded from the computation of As Reported and adjustments to Non-GAAP diluted loss per share as they were anti-dilutive due to the net loss during the period. These shares were added to the weighted-average common shares outstanding to calculate Non-GAAP diluted earnings per common share. |
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The fluctuations in exchange rates between the U.S. dollar in relation to most currencies had a favorable impact on net sales and operating income in the Company’s product categories and regions outside of the United States.
Results by Product Category (Unaudited) |
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Three Months Ended March 31 |
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Net Sales |
Percentage Change |
Operating
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Percentage
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($ in millions) |
2021 |
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2020 |
Reported
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Constant
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2021 |
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2020 |
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Reported
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Skin Care |
$ |
2,259 |
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$ |
1,723 |
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31 |
% |
28 |
% |
$ |
804 |
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$ |
418 |
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92 |
% |
Makeup |
1,018 |
The Estee Lauder Companies Inc.
NYSE:ELEL RankingsEL Latest NewsEL Stock Data
47.67B
229.92M
0.46%
91.54%
1.46%
Toilet Preparation Manufacturing
Manufacturing
United States of America
NEW YORK
About ELthe estée lauder companies inc. is one of the world's leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. as the global leader in prestige beauty, we touch over half a billion consumers a year. our company's products are sold in over 150 countries and territories under the following brand names: aerin, aramis, aveda, becca, bobbi brown, bumble and bumble, by kilian, clinique, darphin, donna karan new york, dkny, editions de parfums frédéric malle, ermenegildo zegna, estée lauder, glamglow, jo malone london, kiton, la mer, lab series, le labo, m•a•c, michael kors, origins, prescriptives, rodin olio lusso, smashbox, tom ford, tommy hilfiger, too faced and tory burch. to explore our current job openings, go to www.elcompanies.com/
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