(Reuters) – Estee Lauder Cos Inc EL.N reported better-than-expected quarterly results on Monday, as people confined to their homes bought more of its skincare products online and sales improved in its Asian markets.
The M.A.C brand owner has ramped up investments in its online business and seen growth in demand for its skincare products as customers opted for serums and moisturizers instead of make-up items during the COVID-19 pandemic.
“Before, online was mainly the destination of younger people. Now it’s for everyone. Everyone is online,” Chief Executive Officer Fabrizio Freda told analysts on a call.
The company’s shares rose as much as 8.3% to a record high on Monday as online sales soared 40% in the first quarter.
Its sales in the Asia-Pacific market rose 9% on the back of strong growth in South Korea, with demand at the company’s duty-free shops in China getting a boost from the government’s move to raise the annual tax-free shopping limit for tourists in the southern province of Hainan.
Total sales at the company’s duty-free shops were flat year over year, after dropping roughly 30% in the previous quarter due to widespread restrictions on air travel.
Total net sales fell 9% to $3.56 billion, but exceeded analysts’ expectations of $3.46 billion, Refinitiv data showed.
Excluding items, the company earned $1.44 per share, beating estimates of 90 cents. It also increased its quarterly dividend by 10%.
Estee forecast net sales to decline between 3% and 5% in the second quarter, compared with estimates of a near 5% decline.
The company also said it expected to earn between $1.45 and $1.60 per share on an adjusted basis in the quarter, below expectations of $1.73 per share, as it invests in its online business and Asia-Pacific units.
Reporting by Aditi Sebastian and Praveen Paramasivam in Bengaluru; Editing by Aditya Soni