Estée Lauder nails quarter

Investors cheer as the company beats expectations after rivals Avon and Revlon fall short.

By Kim Peterson Oct 29, 2010 3:45PM
Woman with lipstick © Stockbyte/PictureQuest Shares of Estée Lauder (EL) shot to an all-time high Friday after the cosmetics company reported stellar earnings, bolstered by strong international sales.

The struggling economy was not a problem for the maker of higher-priced brands such as Clinique and M.A.C. Encouraged by the results, the company raised its full-year profit forecast.

"The luxury consumer is shopping again," chief executive Fabrizio Freda said on a conference call with analysts.

Estée Lauder reported a $191.1 million profit, or 95 cents a share, for the quarter, up from a $140.7 million profit, or 71 cents a share, in the year-ago period.

Removing one-time charges related to restructuring and other items, earnings came in at 97 cents a share. Analysts were expecting only 77 cents a share. Revenue saw a 14% gain to $2.09 billion, and excluding the impact of foreign currency translation the gain rose to 15%.

The results were particularly surprising given the dreary quarters at rivals Avon Products (AVP) and Revlon (REV). Both companies reported disappointing numbers on weak U.S. sales.

"The biggest surprise is that the upside (in first-quarter results) came from better-than-expected sales growth and stronger-than-expected margins, despite the fact that margins had more than doubled in the year-ago quarter," said a Citigroup analyst, according to MarketWatch.

Estée Lauder gave several reasons for its strong performance. They include:
  • Robust sales growth in the U.S.
  • Strong worldwide demand for products
  • An increase in advertising spending in the quarter
  • A weaker U.S. dollar
Sales growth was led by international segments, the company said.

For the current quarter (its second quarter) the company said it expected a profit of $1.32 to $1.45 a share, excluding some one-time charges. Analysts were expecting $1.37 a share.

And the company raised its full-year profit forecast to $2.90 to $3.10 a share. Previously, it had forecast $2.80 to $3.05 a share. Analysts are expecting $3.07 a share.

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

RECENT QUOTES

WATCHLIST

Symbol
Last
Change
Shares
Quotes delayed at least 15 min
Sponsored by:

MARKET UPDATE

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] S&P futures vs fair value: -9.10. Nasdaq futures vs fair value: -19.50. U.S. equity futures trade sharply lower amid cautions action overseas. The S&P 500 futures trade nine points below fair value with some volatility expected around 8:30 ET when the Nonfarm Payrolls report crosses the wires. The Briefing.com consensus expects the report to reveal the addition of 220,000 payrolls in July.

Reviewing overnight developments:

  • Asian markets ended on a ... More


Currencies

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Sponsored by:

VIDEO ON MSN MONEY