The Estée Lauder Companies reports outstanding fiscal 2021 results

The Estée Lauder Companies Inc.[EL] today reported net sales of $16.22 billion for its fiscal year ended June 30, 2021, an increase of 13% from $14.29 billion in the prior-year period. Excluding the impact of currency translation, net sales increased 11%. Net sales grew in every region and in most product categories, reflecting the gradual reopening and recovery in brick-and-mortar retail stores in certain markets compared to the prior year when retail locations closed in most markets during the second half of the year as COVID-19 spread globally. Incremental net sales from the Company’s acquisition of Have&Be Co. Ltd. (“Dr. Jart+”) and the increase in its ownership of Deciem Beauty Group (“DECIEM”) contributed 2 percentage points of growth to reported net sales.

The Company reported net earnings of $2.87 billion, compared with net earnings of $0.68 billion last year. Diluted net earnings per common share was $7.79, compared with $1.86 reported in the prior-year period. Excluding restructuring and other charges and adjustments as detailed on page 3, adjusted diluted net earnings per common share increased 57% to $6.45, and rose 54% in constant currency.

Fabrizio Freda, President and Chief Executive Officer said, “We delivered outstanding results in fiscal 2021, capped by an exceptional fourth quarter and powered by our multiple engines of growth strategy as well as the timeless desirability of prestige beauty. Notably, both sales and profitability meaningfully exceeded fiscal 2019 performance. Amid the challenges of the pandemic, we invested in near- and long-term growth opportunities and managed costs elsewhere with discipline, while making important progress on our social impact commitments and sustainability goals.

Our growth engines of Skin Care, luxury and artisanal Fragrance, Asia/Pacific, travel retail in Asia/Pacific, and global Online performed exceptionally well. Innovation soared and eight of our brands grew sales double-digits, led by Estée Lauder, La Mer, and Jo Malone London. We amplified the strength of our skin care portfolio as we became majority owners of DECIEM, with its coveted brand The Ordinary. We also invested in an innovation center in Shanghai and a manufacturing facility near Tokyo to enhance our rapid growth in the region.”

Fiscal 2021 Results:

Net sales and operating income in the Company’s product categories and regions outside of the United States benefited from a weaker U.S. dollar in relation to most currencies.

Total reported operating income was $2.62 billion, an increase from $606 million in the prior year. In constant currency, adjusted operating income increased 44%, primarily reflecting higher net sales and excluding the following items:

•Fiscal 2021: $117 million of goodwill and other intangible asset impairments related to GLAMGLOW and Smashbox, $71 million of asset impairments related to some of the Company’s freestanding stores, $40 million of DECIEM acquisition-related stock option expense and $226 million of restructuring and other charges and adjustments.

•Fiscal 2020: $1.2 billion of goodwill and other intangible asset impairments related to Too Faced, BECCA, Smashbox, GLAMGLOW and Editions de Parfums Frédéric Malle, $215 million of long-lived asset impairments relating to some of the Company’s freestanding stores, and $66 million of restructuring and other charges and adjustments.

•The favorable impact of currency translation of $48 million.