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bonyadi magazine
Estée Lauder UK and Ireland swings to loss, one-offs mainly to blame but sales did fall
Estée Lauder UK has filed its accounts for the year to last June and they show its performance declining in the British market. The company’s sales fell and it made a big loss
Sales fell by 3% year on year having increased by 2.4% in the previous year, which means the latest 12-month period wiped out those earlier gains. The company said that was a reflection of the impact of the cost-of-living rises experienced by consumers over recent years
Profits-wise, there were some worrying percentage falls on the balance sheet with the company's profit after tax reducing by 480%. However, this was mainly due to the impact of an impairment relating to the company investment in Have & Be Co Ltd (the parent of the Dr Jart+ brand that Lauder acquired in 2019)
The impairment was £439 million and was largely linked to the strategic decision made for Dr Jart+ to exit the travel retail channel globally. The current year results were also impacted by a dividend of £31.5 million from Have & Be compared to one of £39 million in the previous year
Let’s look at more numbers. Turnover was £526.2 million compared to £542.2 million in the previous year, but as turnover fell, the cost of sales increased in the latest period. Gross profit fell to £337 million from £369 million and the firm's operating income dropped by 27% to £67.5 million
The loss before tax amounted to £364.7 million compared to a profit of £115.4 million a year earlier and the net loss for the year was £379 million compared to a profit of almost £93 million in the prior year
But as mentioned, there were one off issues behind that sharp swing to losses this time
The results come as its American parent company is preparing to cut jobs worldwide with recent reports saying more jobs than previously anticipated are being axed.
The loss-making American beauty giant has tens of thousands of employees worldwide with around 4,400 of them based in the UK and Ireland
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