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Jun 30, 2020
Estee Lauder Q4 2020 Earnings Report
Estee Lauder's Q4 2020 results were negatively impacted by COVID-19, but were partially offset by strong online growth.
Key Takeaways
Estee Lauder reported a net sales decrease of 32% for Q4 2020, driven by the impacts of COVID-19, with retail store closures only partially offset by strong online growth. The company reported a net loss of $0.46 billion, and a diluted loss per share of $1.28.
Net sales decreased 32% due to COVID-19 impacts.
Online sales growth partially offset retail store closures.
Net loss was $0.46 billion, with a diluted loss per share of $1.28.
Skin care category net sales grew across most regions, led by Estée Lauder and La Mer.
Estee Lauder
Estee Lauder
Estee Lauder Revenue by Segment
Revenue by Segment
Skin Care Revenue
CapyFin.comMakeup Revenue
CapyFin.comFragrance Revenue
CapyFin.comHair Care Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
The Company continues to believe that strong consumer demand for its high-quality products remains despite ongoing challenges related to COVID-19.
Positive Outlook
- The Company expects to continue to build global share while global prestige beauty progressively returns to growth.
- The Company is driving to return to its long-term growth targets of 6% to 8% sales growth, 50 basis points of operating margin expansion and double-digit adjusted diluted earnings per share growth in constant currency after a period of normalization as the impacts of COVID-19 subside.
- In fiscal 2021, the Company will continue to pursue several long-term strategic initiatives, among them rationalizing unproductive brick-and-mortar stores, increasing manufacturing capabilities, expanding the fulfillment capabilities of its online business, and investing in the growth opportunity of Asia/Pacific.
- The COVID-19 pandemic has significantly accelerated certain trends—most notably consumers’ adoption of the online channel—and as a result, the Company plans to quickly reallocate resources from certain unproductive brick-and-mortar stores, primarily in Europe and in North America, to online and other new brand-building distribution opportunities.
- The Company continues to implement strict cost control actions to manage the business in response to COVID-19.
Challenges Ahead
- Some retail locations in certain markets may not reopen.
- There are likely to be lingering adverse global economic and social impacts.
- The Company is also mindful of other risks related to social, economic and political matters, including restructurings and bankruptcies in the retail industry, destocking and tighter working capital management by retailers, challenges for suppliers, geopolitical tensions, regulatory developments, global security issues, currency volatility, general economic challenges and changes in where and how consumers shop that is affecting consumer spending in certain countries, channels and travel corridors.
- Reported net sales are forecasted to decline between 12% and 13% versus the prior-year period.
- Excluding the impact of the acquisition and 1% negative impact from currency, net sales are forecasted to decrease between 14% and 15%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income