Diversification is the name of the game for The Estée Lauder Cos. Inc.
Despite steep declines in makeup in the U.S. market, and sharp dips in Hong Kong, the beauty conglomerate posted a net sales gain of 11 percent, to $3.9 billion, and a net earnings increase of 19 percent, to $595 million, for its first fiscal quarter of 2020.
“The secret is not never having something in the world that doesn’t work, with such a big business, something will go wrong somewhere, but now we have the flexibility to move in order to always try our best to deliver the total and progress,” said Fabrizio Freda on a call with Wall Street analysts on Thursday.
Lauder attributed this quarter’s gains to many of the same factors that have been driving its growth for the past two years: skin care, travel retail and China.
Conditions in the U.S. remain difficult, especially because of the company’s exposure to department stores and consumer’s shift away from makeup. Sales for the Americas dipped 6 percent in the quarter, to almost $1.2 billion.
“Trends change and a more natural appearance is now in vogue, which requires fewer products than when contouring and other [trends] were popular,” Freda said. “Gen