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Estee Lauder saw its online business grow double digits last quarter during the coronavirus pandemic, CEO Fabrizio Freda told CNBC’s Jim Cramer after the company reported its latest financial results.
“The consumer finds a way to get the product they want” and “found a way to buy our product online more than usual,” he said Friday in an interview with “Mad Money.”
Earlier that day, Estee Lauder released an upside surprise in its third-quarter tax report. The cosmetics company reported that it generated $ 3.3 billion in total revenue and produced 86 cents in earnings per share. Those numbers beat Wall Street estimates of $ 3 billion in revenue and 73 cents in earnings per share.
While sales fell nearly 11% from the prior-year quarter, including declines in all three of its product segments, skincare proved to be the toughest in the group. Compared to double-digit declines in its makeup, hair care and fragrance categories of up to 21%, sales of skin care products fell about 1% during the first three months of 2020, which was affected by the Covid-19 outbreak.
Consumers can cut down on buying cosmetics and perfumes as they are quarantined at home, but they continue to buy products that address their health and wellness while locked up, Freda said.
“Consumers around the world are buying more skin care,” and it is “thriving as a category,” he explained.
“At the same time, you just need to imagine that we are all working with different technologies, like Zoom or Skype, etc., and that many people want to look good in these video interactions.”
Estee Lauder said online sales accelerated between February and March as the coronavirus outbreak spread across Europe and America. The cosmetics company closed most of its retail stores in March when housewife orders went into effect and society began to practice social distancing.
Estee Lauder began reopening retail stores in Asia after closing in February, the company said. It is unclear when the New York-based company expects to reopen locations in Europe, the Middle East, Africa and the Americas.
“In China, the recovery has been quite fast,” Freda said.
Estee Lauder shares fell more than 2% to $ 172.54 at the close on Friday. Stocks are still down roughly 16% on the year, but stocks were up 25% from their March lows during the coronavirus-induced selloff.
