jumped 9% to $7.04 billion. Operating income increased
21% to $749.9 million. Net earnings also jumped 38% to
$448.7 million. Gross profit was $5.2 billion—up 10% from
$4.7 billion in 2006.
By category, net sales of skin care products increased 8%
to $2.6 billion. According to the company, most of this
growth was fueled by new product launches, which made
their most significant impact in the Europe, Middle East
and Africa and Asia/Pacific regions. The recent launches of
Advanced Night Repair Concentrate Recovery Boosting
Treatment and Idealist Refinisher from Estée Lauder and
Repairwear Lift Firming Night Cream, Continuous Rescue
Antioxidant Moisturizer, All About Eyes Rich and Repairwear Contour Firming Formula from Clinique contributed
incremental sales of approximately $95 million, combined.
Net sales increases from the fast-growing La Mer brand,
Resilience Lift Extreme Ultra Firming products and other
existing Advanced Night Repair products from Estée
Lauder, along with products in the Clinique 3-Step Skin
Care System and Superdefense from Clinique, totaled
approximately $97 million.
Makeup net sales increased 8% to $2.7 billion, reflecting
growth from the company’s makeup artist brands of
approximately $191 million.
Net sales of fragrance products increased 8%, to $1.3 billion, primarily driven by incremental international sales
from newer fragrance offerings. DKNY Red Delicious, Pure
White Linen from Estée Lauder, Sean John Unforgivable,
DKNY Red Delicious Men and Donna Karan Gold collectively contributed approximately $128 million to the category.
Hair care net sales increased 18% to $377.1 million, primarily due to sales growth from Aveda and Bumble and
bumble products. Aveda net sales increases were primarily
due to sales of professional color products, the recent
launch of Be Curly shampoo and conditioner and the acquisition of an independent distributor. Bumble and bumble
sales benefited from a new hotel amenities program, sales
growth in its existing salon distribution and new points of
By way of geographic regions, net sales in the Americas
increased 3% to $3.6 billion. The increase was led by
growth in the U.S. of approximately $152 million from the
company’s makeup artist brands, hair care business, internet distribution and the recent launch of the Unforgivable
fragrance by Sean John. Net sales growth in Canada, Latin
America and Mexico contributed an additional $31 million
to the increase.
In Europe, the Middle East & Africa, net sales increased
16% to $2.5 billion. The growth in the region reflected higher net sales of approximately $260 million in the United
Kingdom, Russia, Germany, Spain and Turkey. Net sales in
the Asia/Pacific region increased 13%, to $983.2 million.
The growth in this region reflected higher net sales of
approximately $86 million in Korea, China, Hong Kong and
A New Leader
The most buzzworthy corporate news for the company in
2007 was the announcement of a senior management
change effective this past March. Fabrizio Freda was
named president and chief operating officer.
William P. Lauder will remain chief executive officer,
and Daniel J. Brestle is now vice chairman and president,
ELC North America. Mr. Brestle will continue to oversee
the Estée Lauder, M.A.C, Prescriptives and Tom Ford
Beauty brands and the BeautyBank division on a worldwide basis and will lead the company’s North American
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