(Adds CEO comment from earnings call, analyst quote; Updates shares)
Feb 5 (Reuters) - Estee Lauder Cos Inc on Friday reported a surprise rise in quarterly sales and handily beat profit estimates on strong demand for premium skin-care products and fragrances in China, lifting its shares to a record high.
Shares of New York-based Estee, whose skin-care segment grew 28% on higher demand for its La Mer and Clinique labels, were last up 8.8%.
A sustained strong demand for serums and moisturizers from customers keeping up their self-care routine has helped Estee cushion the pandemic-induced impact of weak demand for traditional make-up items such as foundation and lipsticks.
“The consumers are always more and more enthusiastic for skin care... We assume the skin care strength will continue after COVID-19,” Chief Executive Officer Fabrizio Freda said.
Sales in its Asia-Pacific market rose 35% in the quarter, boosted by robust demand during Tmall’s Singles’ Day shopping event in China, helping Estee post its first growth in overall revenue since the onset of the pandemic.
Concerns about tempered sales due to broader and more stringent lockdowns than anticipated and cannibalization of Chinese domestic travel retail by a strong Singles’ Day period proved misplaced, Barclays analyst Lauren Lieberman said.
Estee said it planned to resume its share buyback program during the second half of the fiscal year, as the company’s cost-cutting measures, including controlling its advertising and promotional expenses, paid off.
Excluding items, Estee earned $2.61 per share in the second quarter, far exceeding analysts’ estimate of $1.69.
Net sales rose 5% to $4.85 billion, also beating a Refinitiv IBES estimate of $4.49 billion.
Estee, however, forecast third-quarter net sales to grow between 13% and 14%, lower than estimates of 15.3% growth, as its makeup sales drag. (Reporting by Aditi Sebastian and Praveen Paramasivam in Bengaluru; Editing by Vinay Dwivedi)