Estee Lauder Cos Inc forecast fiscal 2022 net sales largely above estimates on Thursday, encouraged by a rebound in demand for makeup products as people start venturing out following the easing of coronavirus curbs.
Strong online sales, increased demand in China, and investments in its skincare products helped the M.A.C brand owner cushion the blow from lower makeup sales in 2020 when people working from home shunned its foundations and lipsticks.
Sales of makeup products, however, have rebounded after Americans started trickling back to offices and stepping out for sporting events and dining following mass vaccinations.
An increase in international travel has also helped as affluent customers buy its products in duty-free shops.
"Our growth engines are poised to increasingly diversify as Makeup and Hair Care, developed markets in the west, and brick-and-mortar retail gradually recover," Estee Chief Executive Officer Fabrizio Freda said.
The owner of Clinique projected net sales to increase between 13% and 16% in fiscal 2022. Analysts expect net sales to rise 14% to $18.29 billion, according to IBES data from Refinitiv.
Estee, which analysts say typically provides conservative outlook, also forecast adjusted earnings between $7.23 and $7.38 per share, compared with estimates of $7.14.
The La Mer cosmetics maker is also expected to benefit from the recently opened Sephora stores in Kohl's department stores as well as Ulta Beauty shops inside Target stores carrying its goods.
Sales in its makeup division surged 76% on a reported basis to $960 million in the fourth quarter ended June 30, marking a return to growth for the first time in more than a year.
Net sales in the reported quarter rose 62% to $3.94 billion, beating market estimates of $3.75 billion.
(Reporting by Praveen Paramasivam in Bengaluru, Editing by Sherry Jacob-Phillips) ((Praveen.Paramasivam@thomsonreuters.com;))