US-based Estée Lauder Companies Inc. has reported a strong fourth quarter and fiscal year ended June 30, 2016.
For the three months ended June 30, 2016, the company reported net sales of $2.65 billion, a 5% increase compared with $2.52 billion in the prior-year period, recording across-the-board sales gains in all geographic regions and product categories, except fragrance.
The fiscal 2016 fourth quarter sales benefited from innovative products and double-digit growth in several emerging and developed markets. The company also generated double-digit gains in its travel retail and online channels. Net earnings for the quarter were $93.5 million, compared with $153.0 million last year, while net sales increased 7% excluding the impact of foreign currency translation.
Commenting on the results, Fabrizio Freda, president and CEO, says, “Our fiscal 2016 performance gives us much to celebrate. We again delivered strong constant currency net sales growth and double-digit adjusted constant currency EPS growth, reflecting the compelling products and services we bring to consumers around the world. We capitalised on shifting consumer preferences by leveraging our strength in make-up and positioning our company to win in luxury fragrances. We nimbly allocated resources and made strategic investments in areas that gave us terrific results, including emerging markets, our make-up category and the online and specialty-multi retail channels. Importantly, we achieved these results against a backdrop of social and political instability, currency volatility and economic challenges.”
For the year, the company achieved net sales of $11.26 billion, 4% increase compared with $10.78 billion in the prior year. Net earnings for the year were $1.11 billion, a 2% increase compared with $1.09 billion last year. The fiscal 2016 full year included the effect of restructuring and other charges and adverse currency translation and the comparison with the prior-year period was favourably impacted by accelerated retailer sales orders.
“In fiscal 2017, we will aggressively pursue new opportunities to enhance our leadership position. We will continue to diversify our distribution towards the fastest growing channels, while further developing our mid-sized brands and the newest additions to our portfolio. With our Leading Beauty Forward initiative, we are laying the foundation for future growth by lowering our cost base, increasing our agility and investing behind our strengths and improving our go-to-market capabilities,” adds Freda.
“We will also seek geographic and channel opportunities to reach even more consumers, while keeping a sharp focus on like-door growth. We expect our new product launches, digital programmes, social media engagement and focused merger and acquisition activities to drive constant currency net sales growth of 6-to-8% and double-digit EPS growth over the next three years, excluding restructuring and other charges, consistent with our long-term objectives. For fiscal 2017, we are reflecting the significant external headwinds and volatility and forecasting constant currency sales growth of 6-to-7%. We will thoughtfully balance cost savings, sales leverage and reinvestment to position us to deliver constant currency double-digit EPS growth also this fiscal year,” Freda concludes.
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