Worldwide Net Sales For Quarter Up 14% On Constant Currency Basis;
Diluted Net Earnings Per Share Rise 22%
NEW YORK, April 28 /PRNewswire/ -- The Estee Lauder Companies Inc.
(NYSE: EL) today reported net sales for the third quarter ended March 31, 1998
of $871.5 million, a 10% increase from $791.4 million in the prior year
quarter. Excluding the impact of foreign currency translation, net sales
increased 14% during the quarter.
The Company reported net earnings of $45.7 million for the quarter, up
19% from $38.3 million in the same prior year period. Basic earnings per
common share for the fiscal 1998 third quarter rose 21% to $.34 from $.28 in
the comparable prior year period, and diluted earnings per common share
increased 22% to $.33 from $.27 reported in the same period a year ago.
Leonard A. Lauder, Chairman and Chief Executive Officer, said, "The
momentum we experienced through the first half of this fiscal year continued
into the third quarter where we generated significant top and bottom line
growth. With these results behind us we believe we are poised to meet our
full fiscal year financial objectives."
Mr. Lauder continued, "Key to our strong results were our core businesses
which continue to generate solid operating performances, as well as a full
quarter contribution from the recent acquisitions of jane and Aveda. With the
combined strength of our core and new brands, we see continued growth,
exciting opportunities and a promising future."
In the Americas region, the Company reported a 22% increase in net sales,
to $568.2 million, versus the prior year quarter. The increase was driven by
sales of new products across all categories, particularly fragrances; growth
from existing products; and the inclusion of sales from jane and Aveda, both
of which were acquired in the second quarter of fiscal 1998. Operating income
in the region increased significantly as a result of the higher sales and the
positive impact of operational efficiencies.
In Europe, the Middle East & Africa, net sales increased 7% over the prior
year quarter excluding the impact of foreign currency rate changes. On a
local currency basis, net sales growth was particularly strong in the United
Kingdom, Italy, Germany and Belgium. These increases were partially offset by
lower sales in the travel retail business. Reflecting the impact of the
strong U.S. dollar against European currencies, the Company posted a
1% increase in reported net sales over the prior year quarter to
$209.7 million. Third quarter operating profitability increased compared to
the prior year quarter principally due to improved results in Germany, Italy
and Belgium.
On a local currency basis, Asia/Pacific net sales decreased 9% versus the
prior year quarter. Double-digit sales increases in Thailand and Malaysia
were more than offset by lower sales in Japan and Hong Kong because of
difficult economic and retail environments in those countries. Due to the
continued weakening of Asian currencies against the U.S. dollar, reported net
sales in the region decreased 21% to $93.6 million. Asia/Pacific region
posted an operating loss primarily due to the net sales decrease and
incremental expenditures in Japan associated with the launches of Bobbi Brown
essentials and M-A-C, as well as the continued expansion of Origins.
On a product category basis, the strongest sales growth was generated in
the fragrance category, where third quarter net sales increased sharply, up
31% excluding the impact of foreign currency translation. Reported fragrance
sales grew 27% over the prior year quarter to $174.1 million, driven by the
highly successful current year launches of Lauder Pleasures For Men and
Clinique Happy, the ongoing successful rollout of "tommy girl" and continued
worldwide sales of "tommy," as well as the introduction of the Company's
newest fragrances, Hilfiger Athletics, bobbi and flirt. Makeup product sales
grew 11% excluding the impact of foreign currency translation. Reported
makeup sales increased 9% during the quarter to $352.7 million, due to the
recent introduction of new products such as Clinique's Superlast Cream
Lipstick and Superbalanced Makeup and Estee Lauder's Two-In-One Eyeshadow and
Blush All Day. Net sales of skin care products for the current quarter
increased 4% excluding the impact of foreign currency translation. Skin care
sales benefited from the continued success of Estee Lauder's Uncircle and the
highly successful introductions of Estee Lauder's Diminish and Clinique's All
About Eyes and Weather Everything. Reported skin care product sales of
$324.5 million, were comparable with the prior year reflecting the adverse
impact of currency translation given the relative concentration of skin care
sales in Asia and Europe, as well as difficult comparisons with certain prior
year launches. Sales of hair care products increased to $20.2 million,
reflecting the inclusion of the Aveda product line, the majority of which is
hair care products.
For the nine months ended March 31, 1998, the Company reported net sales
of $2.8 billion, up 6% from $2.6 billion in the comparable prior year period.
Excluding the impact of foreign currency translation, net sales would have
increased 10% during the period. Net earnings for the nine month period
increased to $192.8 million, up 20% over the $160.9 million reported in the
same period last year. Basic earnings per common share for the nine months
ended March 31, 1998 rose 21% to $1.48 from $1.22 in the comparable prior year
period, and diluted earnings per common share increased 21% to $1.46 from
$1.21 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 and fragrance
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, M-A-C, Bobbi Brown essentials, Tommy
Hilfiger, jane, Donna Karan Cosmetics and Aveda.
The forward-looking statements in this press release involve risks and
uncertainties some of which are detailed in the Company's report on Form 10-Q
for the quarter ended March 31, 1998, which will be filed with the SEC today.
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
(In millions, except per share data)
Three Months Ended Nine Months Ended
March 31 March 31
1998 1997 1998 1997
Net Sales $871.5 $791.4 $2,773.0 $2,605.7
Cost of sales 195.1 167.3 628.8 584.7
Gross Profit 676.4 624.1 2,144.2 2,021.0
Selling, general and
administrative expenses:
Selling, general
and administrative 588.1 547.5 1,788.4 1,700.2
Related party royalties 7.5 7.7 24.1 24.7
595.6 555.2 1,812.5 1,724.9
Operating Income 80.8 68.9 331.7 296.1
Interest
(expense) income, net (3.1) 2.3 (2.2) 1.2
Earnings before Income
Taxes and Minority
Interest 77.7 71.2 329.5 297.3
Provision for
income taxes 31.1 29.9 131.8 124.9
Minority interest (0.9) (3.0) (4.9) (11.5)
Net Earnings 45.7 38.3 192.8 160.9
Preferred stock dividends 5.9 5.9 17.6 17.6
Net Earnings
Attributable to
Common Stock $39.8 $32.4 $175.2 $143.3
Net earnings
per common share (A):
Basic $.34 $.28 $1.48 $1.22
Diluted .33 .27 1.46 1.21
Weighted average
common shares
outstanding (A):
Basic 118.4 117.8 118.4 117.5
Diluted 119.9 118.7 119.6 118.4
In December 1997, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings Per Share." Consistent with the
requirements of SFAS No. 128, net earnings per common share and weighted
average common shares outstanding for the three and nine months ended March
31, 1997, have been restated to conform with the provisions of SFAS No. 128.
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 800-758-564336 extension
251850, or use the Internet via
http://www.prnewswire.com/cnoc/exec/menu?251850/
SOURCE Estee Lauder Companies, Inc.
 back to top
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 251850
CONTACT:
Dennis D'Andrea, Investor Relations,
212-572-4384, or Mary Carroll Linder, Media Relations,
212-572-4430, both of Estee Lauder
|
