Estée Lauder Companies maintains a good pace thanks to the perfumery business. The American beauty group invoiced 3.71 billion dollars in the first quarter of its fiscal year, closed on September 30, which represents a 6.5% increase compared to a year earlier. The main driver has been the fragrance division, which includes brands such as Le Labo, Tom Ford, Jo Malone London, and Kilian Paris, and which has grown by 19.4%.
Profitability has also improved. Gross profit advanced by 10.1%, to 2.813 billion dollars, and the gross margin increased by more than two percentage points, to 75.7%. Operating income, meanwhile, soared by 142.8%: it went from 168 million dollars to 408 million.
Fragrances, in the lead
Perfumery, with 861 million dollars in sales, has been the category that has grown the most. Its operating profit increased by 93%, an advance that the company attributes mainly to the increase in net sales, partly offset by a greater investment towards the consumer: launches, activations, and expansion of distribution.
Facial care continues to be the group's largest business, with 1.651 billion dollars (+4.8%), supported by the good performance of La Mer and The Ordinary. Makeup, led by MAC, reached 1.048 billion (+1.7%).
Mainland China, the fastest-growing region
By markets, the largest growth corresponded to mainland China, where sales rose by 15.4%, to 614 million dollars. America remains the region with the greatest weight, with 1.227 billion (+4.5%). Asia-Pacific grew by 9%, to 952 million, and the region that brings together Europe, the United Kingdom, and the Middle East advanced by 2.4%, to 923 million.
Upward forecasts
Following these results, Estée Lauder has improved its forecasts for the full year, which according to the company reflect its solid first-quarter performance. It now expects sales to grow up to 5.5% and the operating margin to be between 12.9% and 13.7%.