Sales for the quarter ending in March increased from $2.86 billion to $3.37 billion, which represented an increase of 13% at a constant currency rate that takes into consideration influences such as currency translations.
This reflected a weakening in the US dollar that helped drive growth in international sales, but negatively impacted the group sales.
The strong sales growth also translated into healthy profit margins for the quarter, with net earnings rising by 25% to $372 million, compared with $298 million in the corresponding quarter last year.
Results driven by the Estée Lauder brand
The company CEO, Fabrizio Freda, commented that the results were driven by a very strong performance that gave company executives reason to believe that the financial year would be ‘oustanding’.
“Among our multiple engines of growth, travel retail, online and Asia again were standouts, and we experienced strong momentum in other high growth channels and markets,” said Freda.
“Our performance this quarter reflected robust global demand across our portfolio, with virtually all our brands posting sales growth. Each of our three biggest brands grew globally, with exceptional growth in Estée Lauder. These results reflect our strong array of hero products, as well as product and service innovations that resonated well with today’s diverse global consumers.”
The strong results led to the company to raise its sales growth expectations for the financial year to between 11% to 12%, while also seeing constant currency earnings per share growth of between 20% and 21%.
Skin care leads the way
On a category basis it was skin care sales that led the way, with reported sales up by 25% to $1.45 billion, a result that was mainly driven by strong sales in the Asia Pacific region.
With respect to skin care brands, the company said that exceptional double-digit growth was reported from La Mer, Estée Lauder, Origins and GLAMGLOW, and Clinique
In the make-up category strong sales growth was said to be primarily driven by strong double-digit increases from Estée Lauder and Tom Ford and solid gains from M•A•C and Clinique, while on a regional basis all regions were strong, although growth in the US was partially offset by slower foot traffic to bricks and mortar stores.
In fragrance, net sales increase steadily, driven by double-digit sales growth for luxury brands, while in hair care a solid performance was driven by strong online and travel retail sales, partially offset by a slower salon channel in North America.