Worldwide Net Sales For Quarter Up 7% on Constant Currency Basis;
Earnings Per Share Up 21%
NEW YORK, Oct. 28 /PRNewswire/ -- The Estee Lauder Companies Inc.
(NYSE: EL) today reported record net sales for the first quarter ended
September 30, 1997 of $900.6 million, a 3% increase from $872.8 million in the
prior year quarter. Excluding the impact of foreign currency translation, net
sales increased 7% during the quarter.
The Company reported record net earnings of $61.8 million for the quarter,
up 17% from $52.7 million in the same prior year period. Earnings per common
share for the fiscal 1998 first quarter rose 21% to $.47 from $.39 reported in
the comparable prior year period.
Leonard A. Lauder, Chairman and Chief Executive Officer, said, "We are
very pleased with our first quarter financial performance. We delivered
another quarter of record sales and earnings, providing a strong foundation
from which to build another year of solid results in line with our financial
objectives."
Mr. Lauder continued, "We have begun our fiscal year in an exciting way,
with major fragrance launches, the introduction of new skin care and makeup
products and the announcements to acquire Sassaby, Inc. and the license for
Donna Karan beauty products."
In the Americas region, the Company reported a 4% increase in net sales,
to $562.4 million, versus the prior year quarter. The increase was
attributable to sales of new products, including the successful introduction
of Lauder Pleasures For Men and the initial shipments of Clinique Happy, solid
performances from newer brands, Origins, MAC and Bobbi Brown essentials in the
United States, as well as higher results in Canada. Operating income in this
region increased as a result of higher sales and the positive impact of
operational efficiencies.
In Europe, the Middle East & Africa, net sales increased 19% over the
prior year quarter excluding the impact of foreign currency rate changes. On
a local currency basis, virtually all markets turned in solid performances
with most markets delivering strong double-digit sales growth, led by the
United Kingdom, Spain, Germany, France and the distributor and travel retail
businesses. Due to the strengthening of the U.S. dollar against most European
currencies, the Company posted a 9% increase in reported net sales for the
three months ended September 30, 1997, over the prior year quarter to $223.9
million. First quarter operating profitability decreased compared to the
prior year quarter resulting from the timing of certain expenses to promote
new product launch activity.
On a local currency basis, Asia/Pacific net sales decreased 3% versus the
prior year quarter; double-digit sales increases in most markets were more
than offset by lower sales in Japan and Hong Kong because of difficult retail
environments. Due to the continued strength of the U.S. dollar versus most
Asian currencies, reported net sales in the region decreased 10% to $114.3
million. Operating profit decreased primarily due to lower operating income
in Japan, Hong Kong and Taiwan, reflecting conservative consumer spending.
From a product category standpoint, sales of fragrance products rose 18%
over the prior year quarter to $271.1 million, driven by the highly successful
current quarter launch of Lauder Pleasures For Men and the initial shipments
of Clinique Happy in the U.S., the continued strong worldwide sales of "tommy"
and the ongoing successful rollout of "tommy girl." Sales in the makeup
category were up 3% during the quarter to $327.0 million, due to the
introduction of new products such as Clinique's Superbalanced Makeup, the
ongoing strength of existing products like Estee Lauder's Indelible Lipstick
and Futurist Age-Resisting Makeup and higher sales from MAC and Bobbi Brown
essentials. Net sales of skin care products for the current quarter decreased
3% excluding the impact of foreign currency translation. Reported skin care
product sales decreased 7% to $302.5 million, due to the adverse impact of
currency translation given the relative concentration of skin care sales in
the Asia/Pacific region, as well as difficult comparisons with certain
launches in the prior fiscal year quarter.
The Estee Lauder Companies Inc. is one of the world's leading
manufacturers and marketers of prestige 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, MAC, Bobbi Brown essentials and
Tommy Hilfiger.
The forward-looking statements in this press release involve risks and
uncertainties some of which are detailed in Exhibit 99.1 to the Company's
report on Form 10-Q for the quarter ended December 31, 1996, previously filed
with the SEC.
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
(In millions, except per share data)
Three Months Ended
September 30
1997 1996
Net Sales $900.6 $872.8
Cost of sales 204.4 199.8
Gross Profit 696.2 673.0
Selling, general and administrative expenses:
Selling, general and administrative 582.2 563.7
Related party royalties 8.0 8.0
590.2 571.7
Operating Income 106.0 101.3
Interest income (expense), net 1.0 (1.2)
Earnings before Income Taxes
and Minority Interest 107.0 100.1
Provision for income taxes 42.8 44.5
Minority interest (2.4) (2.9)
Net Earnings 61.8 52.7
Preferred stock dividends 5.9 5.9
Net Earnings Attributable to Common Stock $55.9 $46.8
Net earnings per common share $.47 $.39
Weighted average common shares outstanding 120.0 118.6
SOURCE The Estee Lauder Companies Inc.
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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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