Estée Lauder benefits from its high-end positioning

" An exceptional year. Fabrizio Freda, the CEO of Estée Lauder, seems more than satisfied with the year 2018 of his group, a year that strengthened the rebound last year by the number two in the world behind L & # 39; Oréal. Driven by skincare and the Asian market, sales of the American giant rose 16% to $ 13 billion, while the operating result rose by 2 1% (up to 17 billion). The net result, however, fell by 11% to 1.1 billion.

Nevertheless, the main brands of the group, sold in specialized networks and department stores, have all gained market share (MAC, Clinic), emphasizes the group. Estée Lauder, the historic label, saw its sales rise by 2% in constant currency. La Mer and its ultra-luxury creams have become the fourth employee of the group, with a turnover of more than a billion dollars.

But it is the category of care that is experiencing the biggest increase (+ 24%), followed by perfumes (+ 12%) and make-up (+ 11%). Moreover, Asia-Pacific, particularly China, was particularly dynamic (+ 29%). According to analysts, the high-end positioning of the group enabled it to counter the delay in distribution in the United States.

On another level Estée Lauder also welcomes the results of her young shoots. Just like L & # 39; Oreal, the New York group strives for new generations, especially in make-up. He put his hand on Too Faced, a web brand, with which he put $ 1.45 billion on the table. A record amount in history.

Heavier taxes

"Our Leading Beauty Forward plan has enabled us to invest more in digital advertising, accelerating our growth", emphasizes Fabrizio Freda. This plan, launched in 2016, requires a reduction of 2.5% in the workforce, the optimization of the supply chain and more investments on the internet and social networks.

Estée Lauder expects an increase of 5% to 6% in 2019. However, the profit forecasts have been reduced: the group estimates that the costs of the restructuring will increase to about 900 million dollars per year, against 600 to 700 million so far.

Dominique Chapuis

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