Estée Lauder Companies (EL 1.19%), a renowned name in the global beauty industry, disclosed its fiscal third-quarter results on May 1, outshining analysts' earnings expectations. The company reported adjusted diluted earnings per share (EPS) of $0.97, beating the estimated $0.75. Revenue reached $3.94 billion, short of projections.
Looking ahead to the final quarter of its fiscal year, the company noted "ongoing macroeconomic headwinds, including continued softness in overall prestige beauty in mainland China, and geopolitical volatility in some areas around the world." It cut its organic net sales outlook range and increased and tightened its adjusted diluted net earnings per common share range
| Metric | Q3 2024 Results | Analyst Estimates | Q3 2023 Results | Change (YOY) |
|---|---|---|---|---|
| Adjusted EPS | $0.97 | $0.75 | $0.47 | 106% |
| Revenue | $3.94 billion | $4.09 billion | $3.75 billion | 5% |
| Skin care net sales | $2.06 billion | N/A | $1.92 billion | 7.6% |
| Net earnings | $330 million | N/A | $156 million | 111% |
Business overview
Estée Lauder Companies manages over 25 iconic brands across skin care, makeup, fragrance, and hair care. Operating in around 150 countries, the company has successfully catered to diverse consumer needs through innovation and strategic brand acquisitions, including the likes of Dr.Jart+ and Deciem Beauty Group.
In recent years, Estée Lauder has sharpened its focus on key growth drivers such as expanding its global footprint, especially in emerging markets, and pushing the boundaries in product innovation and sustainability. These strategic pillars underpin the company's resilience and ability to maintain market leadership in the fast-evolving beauty sector.
Key quarterly highlights
The third quarter of fiscal 2024 was marked by several strategic accomplishments and robust performance in core areas. Estée Lauder's skin care segment recorded an impressive 9% increase in organic net sales. Notably, the company capitalized on the burgeoning demand for luxury skin care products across diverse markets, including in the Asia/Pacific and EMEA (Europe, Middle East, and Africa) regions.
Furthermore, Estée Lauder's strategic pivot toward enhancing high-touch consumer experiences bore fruit, as illustrated by successful new flagship store launches and online platform expansions. The company's adept navigation through the challenges posed by global travel restrictions showcased remarkable agility, particularly with the return to growth in its Asia travel retail segment (selling to people traveling).
CEO Fabrizio Freda was quoted in the company press release as saying:
For the third quarter of fiscal 2024, we delivered our organic sales outlook, exceeded expectations for profitability and continued to improve working capital. La Mer, Estée Lauder, Jo Malone London, Le Labo, and The Ordinary led organic sales growth, driven by beloved hero products and highly sought innovation. Asia travel retail returned to organic sales growth, as developed and emerging markets across Asia/Pacific, EMEA, and Latin America further contributed.
Making plans
With a strategic "profit recovery plan" in place, the company anticipates delivering $1.1 billion to $1.4 billion of incremental operating profit in fiscal years 2025 and 2026. This optimistic outlook is underpinned by continuous investments in key market segments and innovations intended to bolster long-term growth and shareholder value.
