Estée Lauder's makeup sales prove corona habits die hard, even as outings return

Tuesday, May 4, 2021 by Robinhood Snacks | Disclosures

Mentioned in every Vogue skincare video... La Mer's marketing team never sleeps. Estée Lauder is the beauty giant that owns brands like Bobbi Brown, La Mer, Clinique, MAC, Too Faced, and Jo Malone. Its first quarter earnings reveal a glow up from 2020.

  • Sales jumped 16% and were up in every region. But the stock plunged 8% yesterday because... they were slightly lower than expected.
  • "Travel retail" is recovering, especially in China. Think: splurging on Estée fragrances at the airport Duty Free.

Forgot how to do winged liner... (never really knew how). Skincare was the star of Estée's quarter, outperforming while makeup disappointed. Skincare sales soared 31%, perfume sales jumped 30%, and even hair care grew. Meanwhile, makeup dropped 11% — the only category that declined. Rival L'Oreal also reported "lacklustre" makeup sales last quarter.

  • Makeup sales fell across nearly all Estée brands, especially hitting foundation and lip products (no Zoom gloss necessary).
  • Skincare sales were more than 2X makeup sales. In 2018, skincare and makeup sales were about equal.
  • "Hero products" like Advanced Night Repair Synchronized Multi-Recovery Complex (whoa) and Crème de la Mer drove the most demand. Now, Estee is doubling down on skincare investments with The Ordinary.

Old habits die hard... so do some Covid habits. For a year, we’ve been sitting at home fresh-faced. "Big Nights Out" turned into "Big Nights In," complete with self-care rituals. Eye serum became the new eye shadow, and clean became the new cakey. Even with rebounding travel and "revenge spending," makeup is still lagging. That shows some Covid habits are sticking, even through reopenings. Amazon just had its best first quarter ever because ecomm is still growing, and Crocs posted record Q1 sales because comfort is (still) cool.