Estée Lauder Earnings vs. Expectations
In the Q3 earnings report for the beauty company, Estée Lauder generated $3.86 billion in total revenue. This figure represents a 16% increase in total business in comparison to the same quarter last year. The growth in business is largely attributed to the global recovery from the pandemic as more people are using beauty products once again due to the return of public events and social outings.
The beauty company saw a major return to form in net income as well, reporting $456 million in total. Following the $6 million loss reported in the same quarter last fiscal year, this marks a massive turnaround. In terms of diluted earnings, Estée Lauder reported $1.24 per share. After taking on a loss of $0.02 per share last year, the business saw significant total gains. However, Estée Lauder still fell short of analyst expectations, which had projected a faster rate of recovery, estimating earnings at $1.29 per share.
Sales for the beauty company saw increases in business in nearly every area outside of makeup. Skincare was the largest area of growth for the company, seeing total sales increase by 31%. The fragrance portion of business also saw significant gains as well, growing by 30%. Hair care grew sales by 8%, while makeup saw business shrink by 11%.
Future Outlook and Stock Market Reaction
In the annual outlook provided by the company, Estée Lauder expects to see an increase in total annual sales between 11% and 12%. Alongside the growth in annual business, the beauty company is projecting to see total annual earnings per share in the range of $5.31 and $5.48 per share.
Despite increases in overall revenue and a jump in earnings, the Q3 earnings report disappointed many investors. As a result, the beauty company saw its stock fall by over 3% in early pre-market trading. After reaching all-time high stock prices of $318 per share earlier this month, the company is now trading at around $303 per share.
In a statement released alongside the Q3 earnings report, president and CEO of Estée Lauder, Fabrizio Freda, said, “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.”
About the Author
Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.