Estée Lauder Companies (ELC) has seen net earnings slip in its full-year 2022 results, despite posting bumper sales during the period.
ELC reported net earnings of US$2.39bn for the year ended 30 June, compared with the $2.87bn earnings it brought in during 2021.
The Covid-19 pandemic continued to disrupt the company’s operating environment globally, primarily impacting its supply chain, inventory levels and other logistics during the year.
The group’s operations in China were also affected by the resurgence of Covid cases in the country, resulting in reduced retail traffic, travel and distribution capabilities.
ELC was also hit by the termination of its licence agreements with Donna Karan New York, DKNY, Michael Kors, Tommy Hilfiger and Ermenegildo Zegna in June.
Net sales performed better during the period, increasing by 9% to $17.7bn, 2022 and up from the $16.22bn reported a year earlier.
“We delivered excellent results in fiscal 2022, exceeding our expectations in the fourth quarter and achieving record revenue and profitability on an adjusted basis for the year,” said Fabrizio Freda, President and CEO.
Skin care sales increased by 4% to $9.86bn, with net sales growth from La Mer, Clinique and Bobbi Brown.
The double-digit growth from La Mer was driven by strong sales among Chinese consumers in both mainland China and travel retail, despite the increased lockdowns.
Make-up sales also increased by 11% to $4.66bn across ELC’s brand portfolio, which it said reflected continued recovery in western markets.
MAC was highlighted as the key performer for the category, benefiting from increased sales from hero products such as Studio Fix and the launch of MACStack mascara.
Fragrance net sales grew across the majority of ELC’s operating region, and was led by Jo Malone London, Tom Ford Beauty and Le Labo.
Jo Malone London’s double-digit growth was primarily driven by improved colognes sales, particularly in franchises such as English Pear & Freesia.
This is in addition to the launches of House of Roses and the Blossoms Collection.
“Our multiple engines of growth strategy proved invaluable amid pandemic and macro complexity, affording us the diversification to seize growth of the moment,” added Freda.
“The Americas and EMEA prospered, fragrance soared and make-up realised the promise of its emerging renaissance.”