Estee Lauder 2015 Annual Report Download - page 69

66 THE EST{E LAUDER COMPANIES INC.
reported, primarily reflected lower sales of certain Estée
Lauder, Clinique, Coach and Tommy Hilfiger fragrances of
approximately $98 million, combined. These decreases
were mostly offset by the strong performance of luxury
fragrances from Jo Malone London and Tom Ford that
resulted in higher net sales of approximately $91 million,
combined. Excluding the impact of foreign currency trans-
lation and the impact of the accelerated orders, fragrance
net sales would have increased 8%. Excluding the impact
of foreign currency translation, fragrance net sales
increased 5%. Adjusting for the impact of the accelerated
orders, reported net sales in fragrance would have
increased 2%.
Hair Care Hair care net sales increased 3%, or $15.0
million, to $530.6 million. This change reflected the nega-
tive impact of foreign currency translation of approxi-
mately $22 million. The increase in net sales reflected
expanded global distribution of Aveda products in depart-
ment stores, freestanding retail stores, salons and in the
travel retail channel, and Bumble and bumble products in
specialty multi-brand retailers. The category also bene-
fited from increased sales of Smooth Infusion Naturally
Straight from Aveda, as well as the expansion of the
Hairdresser’s Invisible Oil line of products from Bumble
and bumble which contributed approximately $12 million
to the increase, combined. Partially offsetting these
increases were lower sales of the Invati line of products
and Dry Remedy shampoo from Aveda of approximately
$6 million, combined. Excluding the impact of foreign cur-
rency translation and the impact of the accelerated
orders, hair care net sales would have increased 7%.
Excluding the impact of foreign currency translation, hair
care net sales increased 7%. Adjusting for the impact of
the accelerated orders, reported net sales in hair care
would have increased 3%.
Geographic Regions
The overall change in net sales in each geographic region
was negatively impacted by the accelerated orders into
the fiscal 2014 fourth quarter from certain of our retailers
due to our implementation of SMI as follows: Americas,
approximately $169 million; Europe, the Middle East &
Africa, approximately $136 million; and Asia/Pacific,
approximately $52 million.
Net sales in the Americas decreased 1%, or $58.5
million, to $4,513.8 million. Net sales in the United States
and Canada, as reported, decreased approximately $53
million, combined, primarily due to lower net sales from
certain of our heritage brands, driven by the impact of
the accelerated orders and a difficult comparison with the
prior year, which featured significant launch activity
related to the reformulation of certain iconic products.
These decreases were partially offset by higher net sales
from our makeup artist, luxury and hair care brands. Net
sales in Latin America decreased approximately $5 million ,
primarily reflecting lower net sales in Venezuela, partially
offset by higher net sales in Brazil. Excluding the impact of
foreign currency translation and the impact of the acceler-
ated orders, net sales in the Americas would have increased
6%. Excluding the impact of foreign currency translation,
net sales in the Americas increased 2%. Adjusting for the
impact of the accelerated orders, reported net sales in
the Americas would have increased 2%.
In Europe, the Middle East & Africa, net sales decreased
2%, or $77.3 million, to $4,086.4 million, driven by
approximately $285 million of unfavorable foreign cur-
rency translation due to the strength of the U.S. dollar in
relation to most currencies in the region. Lower sales in
our travel retail business, Germany, Iberia and Italy totaled
approximately $185 million, combined. The lower sales in
our travel retail business were driven by the impact of the
accelerated orders. Excluding this impact, travel retail net
sales increased due to a strategic expansion of certain of
our luxury brands and our makeup artist brands, partially
offset by the negative impact of the social instability in
Hong Kong, as well as changes in the purchasing power
of key groups of travelers. The decrease in sales in
Germany, Iberia and Italy was due to the weakening of
the Euro against the U.S. dollar. Excluding this impact, net
sales in Germany, Iberia and Italy increased, primarily
driven by certain of our luxury, makeup artist and hair
care brands as a result of expanded distribution and new
product introductions. Partially offsetting these reported
decreases were higher sales in the United Kingdom and
the Middle East of approximately $122 million, combined.
The increase in sales in the United Kingdom was primarily
driven by our makeup artist and luxury brands. Higher
sales in the Middle East were primarily driven by certain of
our luxury brands and makeup artist brands as a result
of new product introductions and expanded distribution.
Excluding the impact of foreign currency translation and
the impact of the accelerated orders, net sales in Europe,
the Middle East & Africa would have increased 8%.
Excluding the impact of foreign currency translation,
Europe, the Middle East & Africa net sales increased 5%.
Adjusting for the impact of the accelerated orders,
reported net sales in Europe, the Middle East & Africa
would have increased 1%.
Net sales in Asia/Pacific decreased 2%, or $52.5
million, to $2,180.2 million, driven by approximately
$79 million of unfavorable foreign currency translation
due to the strength of the U.S. dollar in relation to certain