Estee Lauder 2012 Annual Report Download - page 112

110 THE EST{E LAUDER COMPANIES INC.
Product Categories
Skin Care Net sales of skin care products increased
14%, or $506.6 million, to $4,225.2 million, primarily
reflecting the continued success of our strategic focus on
growing this category. The recent launches of Turnaround
Overnight Radiance Moisturizer, Moisture Surge Intense
and Repairwear Uplifting Firming Cream from Clinique
and Revitalizing Supreme Global Anti-Aging Creme from
Estée Lauder contributed incremental sales of approxi-
mately $78 million, combined. Higher sales of Idealist
Even Skintone Illuminator, Advanced Night Repair
Synchronized Recovery Complex and Idealist Cooling Eye
Illuminator from Estée Lauder and various products from
La Mer and Origins contributed approximately $237 mil-
lion, combined, to the increase. The relaunch of the refor-
mulated Resilience Lift and Nutritious Vita-Mineral lines of
products from Estée Lauder contributed incremental sales
of approximately $187 million, combined. This growth
was partially offset by approximately $112 million of lower
sales from the existing line of Resilience Lift Extreme prod-
ucts 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 recent 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
Chubbystick Moisturizing Lip Colour balm from Clinique
contributed 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
Repairwea r Anti-Aging Makeup from Clinique of approxi-
mately $34 million, 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 recent launches of Estée Lauder Sensuous Nude
and DKNY Golden Delicious contributed approximately
$58 million, combined, to the category. Higher sales from
Jo Malone and Tom Ford fragrances contributed approxi-
mately $37 million to the increase. Partially offsetting
these increases were approximately $68 million, com-
bined, 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 mil-
lion, to $462.4 million, reflecting an increase in sales gen-
erated from expanded global distribution. The category
also benefited from new 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 products due, in part,
to softness in our business in the direct response televi-
sion channel. The impact of foreign currency translation
on hair care net sales was de minimis.
Geographic Regions
Net sales in the Americas increased 8%, or $304.8 million,
to $4,101.1 million. The increase during the current year
was primarily attributable to growth in the United States
of approximately $257 million, primarily due to new prod-
uct 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
ongoing efforts to work with retailers in the U.S. depart-
ment store channel on strengthening the “High-Touch”
concepts used to help market our products. Net sales in
Latin America increased approximately $30 million, pri-
marily 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.
Accordingly, we remain cautious in the near term. 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