Estee Lauder 2015 Annual Report Download - page 74

THE EST{E LAUDER COMPANIES INC. 71
existing Advanced Night Repair Synchronized Recovery
products from Estée Lauder and Dramatically Different
Moisturizing Lotion and Repairwear Laser Focus from
Clinique of approximately $493 million, combined. Exclud-
ing the impact of foreign currency translation, skin care
net sales increased 8%. Adjusting for the impact of the
accelerated orders, reported net sales in skin care would
have increased 5%.
Makeup Makeup net sales increased 9%, or $333.3 mil-
lion, to $4,210.2 million, primarily reflecting higher net
sales from our makeup artist brands, the fiscal 2014
launch of All About Shadow from Clinique and higher
sales of Smashbox products of approximately $339 mil-
lion, combined. Sales from our makeup artist brands ben-
efited from new product offerings, as well as expanded
distribution in line with our retail store strategy. Partially
offsetting these increases were lower sales of Chubby
Stick Moisturizing Lip Colour Balm and High Impact Lip
Color from Clinique, as well as the fiscal 2013 launches of
Pore Refining Solutions Makeup from Clinique and Pure
Color Vivid Shine Lipstick from Estée Lauder of approxi-
mately $34 million, combined. The impact of foreign cur-
rency translation on makeup net sales was de minimis.
Adjusting for the impact of the accelerated orders,
reported net sales in makeup would have increased 7%.
Fragrance Net sales of fragrance products increased 9%,
or $114.2 million, to $1,425.0 million, primarily reflecting
the fiscal 2014 launches of Estée Lauder Modern Muse,
the Michael Kors Collection, Jo Malone Peony & Blush
Suede and Tory Burch, as well as higher sales of Tom Ford
Black Orchid of approximately $149 million, combined.
These increases were partially offset by lower sales of
Estée Lauder pleasures, Donna Karan Cashmere Mist,
DKNY Be Delicious So Intense and Coach Poppy of
approximately $31 million, combined. The impact of
foreign currency translation on fragrance net sales was
de minimis. Adjusting for the impact of the accelerated
orders, reported net sales in fragrance would have
increased 7%.
Hair Care Hair care net sales increased 5%, or $26.7
million, to $515.6 million, reflecting the continued success
and growth of the Invati line of products and the new and
reformulated Dry Remedy line of products from Aveda,
which contributed approximately $25 million, combined
to the increase. The category benefited from sales gener-
ated from expanded global distribution of Aveda products
to salons and in the travel retail channel and Bumble and
bumble products to specialty multi-brand retailers.
Partially offsetting these increases were lower sales of
Ojon products. The decrease in Ojon net sales was
primarily due to the exit of that business from the direct
response television channel in our fiscal 2014 second
quarter. Excluding the impact of foreign currency transla-
tion, hair care net sales increased 6%. The impact of the
accelerated orders on the change in reported net sales in
hair care was de minimis.
Geographic Regions
The overall change in net sales in each geographic region
benefited from the accelerated orders during fiscal 2014,
as discussed above, as follows: Americas, approximately
$84 million; Europe, the Middle East & Africa, approxi-
mately $68 million; and Asia/Pacific, approximately $26
million.
Net sales in the Americas increased 6%, or $269.4
million, to $4,572.3 million, primarily reflecting higher net
sales in the United States of approximately $231 million,
including the $84 million in accelerated orders. This
growth primarily reflected new collections from our
makeup artist brands, higher sales of prestige products
from our luxury brands, the continued expansion of
Smashbox at specialty multi-brand retailers and depart-
ment stores, contributions from new product innovations
from certain of our heritage brands, fiscal 2014 launches
from certain of our designer fragrances and expansion
into new retail channels by certain of our hair care brands.
Net sales in Latin America increased approximately $24
million, led by Venezuela and Brazil. The net sales increase
in Venezuela was primarily due to price increases as a
result of rising inflation. Net sales in Canada increased
approximately $15 million. Excluding the impact of foreign
currency translation, the Americas net sales increased
7%. Adjusting for the impact of the accelerated
orders, reported net sales in the Americas would have
increased 4%.
In Europe, the Middle East & Africa, net sales increased
11%, or $405.0 million, to $4,163.7 million, primarily
reflecting higher sales from our travel retail business, the
United Kingdom, Germany and France of approximately
$335 million, combined. The net sales increase in our
travel retail business primarily reflected the success of
fiscal 2014 launch initiatives, an increase in global airline
passenger traffic and expanded distribution, as well as the
impact of the accelerated orders. This was despite a slow-
down at retail, in part, due to an adverse impact of
Chinese government actions on the travel and spending
of Chinese consumers. Higher sales in the United Kingdom
and France were primarily driven by certain of our
makeup artist and luxury brands. The net sales increase in
Germany was primarily driven by our makeup artist and
certain of our heritage brands. These increases were par-
tially offset by lower net sales in South Africa and India of