Estée Lauder plans “targeted” investments in 2017

The company’s President and CEO says he expects fiscal-year sales growth of 6-7%

The Estée Lauder Companies’ President and CEO Fabrizio Freda revealed plans to make targeted investments this fiscal year.

Talking about the company’s Q2 2017 results, Freda said: “We plan to make targeted investments throughout the balance of the fiscal year to support and grow our brands.”

This strategy, combined with product innovation, increased consumer coverage and improving trends in certain brands and markets, rounds out the company’s plan to achieve sales growth of 6-7% for the fiscal year.

Acquisitions boost sales

The Estée Lauder Companies registered better-than-expected profits in Q2 2017, thanks in part to the acquisitions of Too Faced, Becca and By Kilian.

The acquisitions contributed roughly 90 basis points to sales growth, of which less than half was down to Too Faced.

Talking about the takeover of Becca and Too Faced – the latter of which was rumoured to be the company’s largest acquisition in its history at $1.4bn – Freda added: “Both brands complement our make-up portfolio, which is the fastest-growing category in prestige beauty, and strengthen our position in the specialty-multi retail channel globally. We have ample room to expand their consumer reach.”

Strong overall performance

The company posted net sales of $3.21bn, up 3% compared with the prior year quarter. Meanwhile, net earnings were $428m and diluted net EPS were $1.15.

Fabrizio Freda, President and CEO, said: “Our second quarter sales growth accelerated as planned, reflecting the benefits of our portfolio diversity by brand, channel, product category and country.”

Freda explained that the company’s small, mid-sized and luxury brand led growth, with Estée Lauder and MAC brands growing on a constant currency basis.

Double digit growth was achieved in The Estée Lauder Companies’ best-performing channels, which include travel retail, online and specialty-multi retail.

Looking to full-year 2017 results, the company expects 2017 fiscal year constant currency sales growth of 6-7%.

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