Estée Lauder, the renowned manufacturer of beauty products and cosmetics, revealed on Friday that a stronger dollar compared to most currencies had a detrimental effect on its net sales and operating income for the 2023 fiscal year.
Unfavorable FX Impact on Net Sales
According to Estée Lauder, reported net sales suffered a 4% unfavorable impact due to foreign currency translation. The Asia-Pacific market bore the brunt of this impact with an 8% decline, while the Europe, Middle East, and Africa (EMEA) region witnessed a 3% decrease.
Unfavorable FX Impact on Key International Travel Retail Locations
Estée Lauder also reported a 1% unfavorable foreign exchange (FX) impact on both reported and organic net sales in key international travel retail locations. Within the EMEA region, this impact was even more pronounced, reaching 2%.
Declining Net Sales for Fiscal Year 2023
In the year ending on June 30, Estée Lauder’s net sales amounted to $15.91 billion, marking a 10% decline compared to the prior year.
Potential Headwind for Fiscal Year 2024
Estée Lauder acknowledges the strengthening U.S. dollar as a potential challenge that may negatively affect its performance in the fiscal year 2024.
The Rise of the WSJ Dollar Index
From July 2022 to June 2023, the WSJ Dollar Index experienced a modest increase of 0.1%. Moreover, since the beginning of this year, it has risen by 1.7%.
