Estee Lauder topped quarterly profit and sales estimates on Monday as customers bought more of its namesake makeup and high-margin Clinique and La Mer skincare products at duty free stores, online and beauty-focused retailers.
Shares of the company rose 6 percent in early trading.
The company’s strong results were in contrast to rival Revlon and e.l.f Beauty’s lower-than-expected quarterly sales reported earlier in August due to poor demand across U.S. retailers.
Analysts have said Estee’s more premium products and wide portfolio of cosmetics products helped it offset much of the slowdown in U.S. retail.
Sales at Estee’s skincare products jumped 29 percent in the quarter and beat the analyst average estimate, offsetting a slowdown in sales at its makeup business that posted its slowest growth in nearly two years.
Makeup sales were muted due to weak demand for its M.A.C. cosmetics in the United States where store traffic continues to fall at both department and standalone stores.
Fragrance sales, especially those of Jo Malone London and Tom Ford, jumped 11 percent on the back of high demand in North America and Europe.
Overall, quarterly sales rose 14 percent to $3.3 billion, beating the average analyst estimate of $3.25 billion, according to Thomson Reuters.
Estee Lauder said its plan to free up more cash for its faster growing brands by cutting costs is likely to help it save between $350 million-$450 million a year, higher than the $200-$300 million it had expected earlier.
However, the 72-year-old cosmetics company expects a stronger dollar – up 4.4 percent so far this year – to hurt its first quarter profit and sales.
Estee expects earnings of $1.18-$1.22 per share, compared with the analysts’ average estimate of $1.32, according to Thomson Reuters.
Net income fell 19 percent to $186 million or 49 cents per share in the quarter ended June 30. Excluding items it earned 61 cents per share, beating the average estimate of 56 cents.