Sales in other regions were strong, with the UK outperforming all other European countries
Organic sales grew overall for Q3, primarily due to ELC's takeover of Deciem
History is repeating itself at Estée Lauder Companies (ELC) with the cosmetics company reporting a dip in sales across Greater China for Q3 of 2022.
A reduction in retail traffic and temporary restrictions to prevent the spread of Covid-19 were primarily responsible for the slowdown.
However, the category reported a 9% growth for the three month period, partially offset by growth in southeast Asia and Japan.
Naturally, these restrictions hit sales of colour cosmetics the hardest with skin care also down.
Fragrance and hair care sales were able to partly offset these losses.
Sales of products in Russia and Ukraine also declined due to the ongoing war.
ELC was one of the first companies to sever ties with Russia back in March.
The cosmetic giant saw the most growth in Europe, however.
Led by the UK, net sales were up double digits across every product category, and with bricks-and-mortar recovering compared with the previous year.
In spite of the difficulties in key markets, ELC reported 9% growth of organic sales – mainly driven by the majority acquisition of Deciem and closure of Becca Cosmetics.
For the nine months to 31 March net sales surpassed US$14bn.
“We delivered strong sales growth and better-than-expected profitability in the third quarter of fiscal 2022 in the face of accelerated headwinds as the quarter evolved, including Covid-19 restrictions in the Asia/Pacific region,” said ELC’s President and Chief Executive, Fabrizio Freda.
“Every category grew organically, led by fragrance’s outstanding performance globally and the make-up renaissance in western markets.
“Eleven brands contributed double-digit organic sales growth and further demonstrated our diversification, empowered by our multiple engines of growth strategy.
“Consumer demand remained robust even in this more inflationary environment.”