Estee Lauder 2013 Annual Report Download - page 130

128 THE EST{E LAUDER COMPANIES INC.
Geographic Regions
Net sales in the Americas increased 8%, or $304.8 million,
to $4,101.1 million. The increase in fiscal 2012 was primar-
ily attributable to growth in the United States of approxi-
mately $257 million, primarily due to new product
offerings from our heritage and makeup artist brands, as
well as an increase in sales of our higher-end prestige skin
care products. These increases reflect, in part, our ongo-
ing efforts to work with retailers in the U.S. department
store channel on strengthening the “High-Touch” con-
cepts used to help market our products. Net sales in Latin
America increased approximately $30 million, primarily
reflecting growth in Brazil and Chile. Net sales in Canada
increased approximately $19 million, primarily reflecting
increased sales from our heritage and makeup artist
brands. The impact of foreign currency translation on net
sales in the Americas was de minimis.
In Europe, the Middle East & Africa, net sales increased
11%, or $345.6 million, to $3,603.2 million, due to growth
in each major product category reflecting our strategy to
strengthen our geographic presence and continue to suc-
ceed in the travel retail channel. Due to the economic
uncertainties in Europe, our business in some countries
experienced slower than anticipated net sales growth. Net
sales increases of approximately $313 million were driven
by our travel retail business, the United Kingdom, the
Middle East, Germany and Italy. The net sales improve-
ment in our travel retail business reflected an increase in
global airline passenger traffic, new points of distribution
and benefits of programs designed to enhance consum-
ers’ “High-Touch” experiences and convert travelers into
purchasers. The growth in the United Kingdom, Germany
and Italy was primarily attributable to successful launches
of skin care and makeup products from certain of our
heritage brands, as well as higher combined sales from
our makeup artist brands. Net sales in the Middle East
benefited from a new fragrance launch designed specifi-
cally for consumers there, in line with our strategy to be
locally relevant. These increases were partially offset by
lower net sales in Russia, Spain and the Balkans of approx-
imately $25 million, combined. The lower net sales in
Russia primarily reflected destocking associated with
ongoing challenges with a certain customer. Net sales in
Spain and the Balkans declined primarily due to difficult
economic environments. Excluding the impact of foreign
currency translation, net sales in Europe, the Middle East
& Africa increased 12%.
Net sales in Asia/Pacific increased 14%, or $250.7 mil-
lion, to $2,011.4 million, reflecting growth in each major
product category and from most countries in the region,
several of which had a significant favorable impact of
Vita-Mineral lines of products from Estée Lauder con-
tributed incremental sales of approximately $187 million,
combined. This growth was partially offset by approxi-
mately $112 million of lower sales from the existing line
of Resilience Lift Extreme products from Estée Lauder
and Cyber White EX from Clinique. Excluding the impact
of foreign currency translation, skin care net sales
increased 13%.
Makeup Makeup net sales increased 10%, or $326.0 mil-
lion, to $3,696.8 million, primarily reflecting an increase in
net sales from our makeup artist brands of approximately
$218 million, combined. The fiscal 2012 launches of
Repairwear Laser Focus All-Smooth Makeup and Lid
Smoothie Antioxidant 8-Hour Eye Colour from Clinique
and Doublewear Stay-In-Place Makeup from Estée Lauder
contributed approximately $85 million, combined, to the
increase. Higher sales of Even Better Makeup and Chubby
Stick Moisturizing Lip Colour balm from Clinique contrib-
uted approximately $41 million to the increase. This
growth was partially offset by lower sales of Doublewear
Powder Makeup and Doublewear Stay-in-Place Flawless
Wear Concealer from Estée Lauder and Repairwear Anti-
Aging Makeup from Clinique of approximately $34 mil-
lion, combined. The impact of foreign currency translation
on makeup net sales was de minimis.
Fragrance Net sales of fragrance products increased 3%,
or $35.0 million, to $1,271.0 million. Incremental sales
from the fiscal 2012 launches of Estée Lauder Sensuous
Nude and DKNY Golden Delicious contributed approxi-
mately $58 million, combined, to the category. Higher
sales from Jo Malone and Tom Ford fragrances contrib-
uted approximately $37 million to the increase. Partially
offsetting these increases were approximately $68 million,
combined, of lower sales of DKNY Be Delicious, Estée
Lauder Sensuous, pureDKNY and Estée Lauder pleasures
bloom. The impact of foreign currency translation on
fragrance net sales was de minimis.
Hair Care Hair care net sales increased 7%, or $30.1
million, to $462.4 million, reflecting an increase in sales
generated from expanded global distribution. The cate-
gory also benefited from fiscal 2012 launches including
the Invati line of products from Aveda and Concen-
Straight from Bumble and bumble. Partially offsetting
these increases were lower net sales of Ojon brand prod-
ucts due, in part, to softness in our business in the DRTV
channel. The impact of foreign currency translation on
hair care net sales was de minimis.