Earnings Per Share For Quarter Increases 15%
NEW YORK, Jan. 26 /PRNewswire/ -- The Estee Lauder Companies Inc.
(NYSE: EL) today reported net sales for the second quarter ended December 31,
1998 of $1.1 billion, a 9% increase from $1.0 billion in the prior year
quarter. Excluding the favorable impact of foreign currency translation, net
sales increased 8% during the quarter.
The Company reported net earnings of $97.3 million for the quarter, up
14% from $85.3 million in the same period last year. Basic earnings per
common share for the quarter rose 15% to $.77 from $.67 in the same period a
year ago, and diluted earnings per common share were also up 15% to $.76 from
$.66 reported in the comparable prior year period.
Leonard A. Lauder, Chairman and Chief Executive Officer, said, "We have
had another very strong quarter of sales and earnings growth. Our operating
performance this quarter is an indication of the extraordinary strength of our
product portfolio and clearly demonstrates our continuing momentum."
Mr. Lauder continued, "Our Company's second quarter results complete an
excellent first half performance for fiscal 1999. We are on track to meet our
financial objectives for the fiscal year."
In the Americas region, the Company reported a 7% increase in net sales,
to $623.0 million, versus the prior year quarter. The increase was
attributable to the strength of new products across all categories, growth
from existing products and the inclusion of a full quarter sales from jane and
Aveda, both of which were acquired in the second quarter of fiscal 1998.
Operating income in the region increased as a result of the higher sales and
operating expense improvements.
In Europe, the Middle East & Africa, net sales on a reported basis
increased 16% over the prior year quarter to $328.1 million. Virtually all
markets turned in solid performances, led by the United Kingdom, Spain,
Germany, Italy and the distributor and travel retail businesses. Excluding the
impact of a weaker U.S. dollar against most European currencies, net sales on
a local currency basis increased 12%. Second quarter operating profitability
increased compared to the prior year quarter, principally due to improved
results in Germany, Italy and the distributor and travel retail businesses.
On a reported basis, Asia/Pacific net sales increased 5% over the prior
year to $139.9 million. Sales growth was driven by increases in Japan,
Thailand and Taiwan, partially offset by lower sales in Korea and Hong Kong.
Excluding the impact of a weaker U.S. dollar against certain Asian currencies,
net sales on a local currency basis increased 4%. Operating profit increased
due to higher results in Japan, reflecting planned efficiencies in operating
expenses, along with strong growth in Taiwan and Thailand.
Net sales of skin care products for the current quarter increased 12% to
$345.3 million. Skin care sales benefited from the continued success of Estee
Lauder's Diminish and Clinique's All About Eyes and the initial shipments of
Estee Lauder's Resilience Lift and Clinique's Stop Signs. Sales of makeup
products grew 7% during the quarter to $353.6 million. Higher sales resulted
from recent product introductions such as Clinique's Quickliner For Eyes and
Prescriptives' Photochrome, and the ongoing strength of existing products like
Estee Lauder's Two-In-One Eyeshadow and Double Wear Stay-in-Place Makeup, and
Clinique's Smudgesicles. Sales increases of new and existing products from
other brands also fueled makeup growth. Fragrance sales grew 5% over the
prior year quarter to $370.3 million, driven by the success of Estee Lauder's
Dazzling Gold and Dazzling Silver, continued strong sales of Clinique Happy,
the ongoing success of "tommy girl" and contributions from Hilfiger Athletics.
Sales of hair care products increased to $21.8 million, reflecting the
inclusion of the Aveda hair care product line.
For the six months ended December 31, 1998, the Company reported net sales
of $2.1 billion, up 10% from $1.9 billion in the comparable prior year period.
Excluding the impact of foreign currency translation, net sales also increased
10% during the period. Net earnings for the six month period increased to
$168.9 million, up 15% over the $147.1 million reported in the same period
last year. Basic earnings per common share for the six months ended December
31, 1998 rose 17% to $1.33 from $1.14 in the comparable prior year period, and
diluted earnings per common share increased 16% to $1.31 from $1.13 reported
in the same period a year ago.
The Estee Lauder Companies Inc. is one of the world's leading
manufacturers and marketers of quality skin care, makeup, fragrance and hair
care products. The Company's products are sold in over 100 countries and
territories under well-recognized brand names, including Estee Lauder,
Clinique, Aramis, Prescriptives, Origins, MoAoC, Bobbi Brown essentials, Tommy
Hilfiger, jane, Donna Karan and Aveda.
The forward-looking statements in this press release, such as those in
quotations, involve risks and uncertainties. Factors that could cause actual
results to differ from those statements are contained in the Company's filings
with the SEC, including those detailed in the "forward-looking statements"
section of the Company's report on Form 10-Q for the quarter ended September
30, 1998. They include competition, changes in the retail industry, foreign
currency fluctuations and other risks related to doing business abroad and
changes in product mix to ones which are less profitable.
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
(In millions, except per share data)
Three Months Ended Six Months Ended
December 31 December 31
1998 1997 1998 1997
Net Sales $1,091.0 $1,000.9 $2,088.0 $1,901.5
Cost of sales 249.8 229.3 479.4 433.7
Gross Profit 841.2 771.6 1,608.6 1,467.8
Operating expenses:
Selling, general
and administrative 670.3 618.1 1,308.5 1,200.3
Related party royalties 9.1 8.6 16.7 16.6
679.4 626.7 1,325.2 1,216.9
Operating Income 161.8 144.9 283.4 250.9
Interest (expense)
income, net (4.8) (0.1) (10.9) 0.9
Earnings before
Income Taxes and
Minority Interest 157.0 144.8 272.5 251.8
Provision for
income taxes 59.7 57.9 103.6 100.7
Minority interest -- (1.6) -- (4.0)
Net Earnings 97.3 85.3 168.9 147.1
Preferred stock
dividends 5.8 5.8 11.7 11.7
Net Earnings
Attributable to
Common Stock $91.5 $79.5 $157.2 $135.4
Net earnings per
common share:
Basic $.77 $.67 $1.33 $ 1.14
Diluted .76 .66 1.31 1.13
Weighted average
common shares
outstanding:
Basic 118.3 118.4 118.4 118.4
Diluted 120.1 119.5 120.1 119.4
Estee Lauder press releases are available at no charge through Estee
Lauder Companies News On-Call fax service. For a menu of Estee Lauder press
releases or to retrieve a specific release, call 800-758-5804, extension
251850, or use the Internet via
http://www.prnewswire.com/cnoc/exec/menu?251850/
SOURCE Estee Lauder Companies Inc.
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http://www.prnewswire.com/comp/251850.html or fax,
800-758-5804, ext. 251850
CONTACT:
Investor Relations: Dennis D'Andrea,
212-572-4384, or Media Relations: Mary Carroll Linder,
212-572-4430, both of Estee Lauder
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