On November 1st, Est é e Lauder (hereinafter referred to as the Group) released its first quarter financial report for the 2024 fiscal year. During the reporting period, the company's revenue was $3.518 billion, a year-on-year decrease of 10.48%, and its net profit was $31 million, a year-on-year decrease of 92.66%. As of the close on November 1st, Est é e Lauder's stock price fell 18.92%, with a total market value of $37.4 billion.
Today (November 2nd), at Est é e Lauder's 2024 Q1 conference call, the management analyzed the operation of the Chinese market. The company management stated that due to the slower than expected recovery rate of high-end beauty products in the Chinese market, the organic net sales in the Asia Pacific region decreased by 3%.
In addition, net sales in the Chinese market have decreased due to the impact of skincare categories. Perfume category has a strong growth driven by the launch of Le Labo in the fourth quarter of fiscal year 2023, and hair care category has also grown with the help of Aveda, which partially offset the decline of skin care category. The net sales of the cosmetics category remained basically unchanged, with double-digit growth from TOM Ford offsetting the decline in MAC and Est é e Lauder.
In the 2024 fiscal year, we will continue to focus on driving market growth, including restoring US market growth, normalizing Asian tourism retail inventory, and continuously expanding the high-end beauty market share in China. In the 2025 and 2026 fiscal years, we will further accelerate the implementation of profit recovery plans and strengthen profitability.
Although the performance of skin care products in the Chinese market was less than expected, the management believed that the perfume category was still an important growth point, and the perfume category business achieved organic growth in sales for the 11th consecutive quarter, especially in the Asia Pacific region. "Perfume categories are in a long-term growth period with broad prospects in the Asia Pacific region. Consumers in the Asia Pacific region are increasingly demanding perfume products, and the proportion of perfume categories in the region is still at a low level compared with the western market." The management said that perfume categories in the Asia Pacific region only account for 8% of the overall high-end beauty business, while in Western Europe, the proportion is up to 40%.
Estee Lauder Group's main business includes the production and sales of skin care products, cosmetics, perfume and hair care products, as well as the sales of global luxury goods and high-end brands. At present, the company's products are sold to about 150 countries and regions around the world.
In 1993, the Est é e Lauder brand entered the mainland Chinese market and established its first sales counter in Shanghai. In July 2002, Est é e Lauder officially established a wholly-owned subsidiary in China. Nowadays, Est é e Lauder Group has 16 brands in China, including Est é e Lauder, LA MER, MAC, Clinique, and Jo Malone London.
In 2005, Est é e Lauder established an innovation research and development center in Shanghai, and in 2011, it was upgraded to the group's Asia Pacific research and development center. In 2020, the Est é e Lauder Global R&D Center China project was officially launched. It is reported that since 2018, China has become the largest international market for Est é e Lauder.
At the conference call, the management also stated that "China is our second home country, with significant market share in key categories. We have a 30 year development history in China. In the future, there will be corresponding strategic deployments. China is the key to winning the high-end beauty market.