Fabrizio Freda, President and Chief Executive Officer of The Estée Lauder Companies Inc., highlighted the beauty firm’s global fiscal 2015 performance at the Barclays Global Consumer Staples Conference in Boston on Thursday, September 10. Some highlights from the presentation included insights into the company’s digital, emerging markets and travel retail goals based on a year that ended with $10.78 billion in sales.

Overall, Lauder’s 2014 global prestige beauty share was 14.8%, up from 14.1% in 2009; share has grown three percentage points more than the global category over the past five years. Brands representing one-third of the company’s sales are growing in double digits. MAC, one its three brands with more than $2 billion in net sales, grew double digits in 2015. Estée Lauder and Clinique declined slightly during the year. Mid-sized brands, including Bobbi Brown, Tom Ford and Smashbox, grew double digits.

“In fiscal year 2015 we successful navigated many external challenges…including an ongoing downturn in Hong Kong and Macau, and lower growth in China,” said Fabrizio, adding that the travel retail channel was affected by these events and also an outbreak of Mers and fewer travelers, particularly Chinese, Brazilian and Russian tourists. “This issue had the most impact on Estée Lauder and Clinique and their large skin care business. But as skin care growth lowered, MAC and mid-sized brands grew doubled digits.” 

Digitally, e-commerce grew to about 8% of total sales—overall online sales grew 28% during the fiscal year—and is expected to reach a milestone of $1 billion this fiscal year. In developed markets such as the US, 12% of total sales are generated online.

There are company branded sites in 30 countries and there are plans to launch 50 new global e-commerce and mobile sites in the fiscal year, which will include five new countries and further expansion on China’s Tmall platform.

Developed markets, such as the US, represent about 37% of total sales, and the UK, which has grown double digits in the past two years, is expected to continue its growth pace. The fastest growth is coming from emerging markets: combined sales of emerging markets outside of China is bigger than China, and grew 26% last year.

There are 1,060 company-operated stores globally, Fabrizio said. The company plans to open 250 stores in the next 12 months, which looks “to allow for a smoother transition to future omni-channel initiatives.”

Despite global concerns on China’s growth, Lauder continues to view Chinese consumers as one of its biggest long-term growth opportunities. China represents 6% of global company sales; the region’s sales grew 6% in fiscal year 2015. There are 14 of the company’s brands sold there, less than half the portfolio, so opportunities exist. E-commerce in China more than doubled in fiscal 2015. Today, the company has six brand sites in China and four on Tmall, including Estée Lauder.

Focus is now on the fastest growing retailers, such as specialty, travel retail and e-commerce. Travel retail is critical driver, with China and Korea seen as the two biggest markets. International passenger traffic is expected to increase 4% to 5% over the next few years, Fabrizio said, Lauder expects to exceed that pace.