NEW YORK, Aug. 13 /PRNewswire/ -- On the strength of new products, new
brands and continued growth of existing brands, The Estee Lauder Companies
Inc. (NYSE: EL) today announced a 10% increase in net sales for the fiscal
year ended June 30, 1996, to a record $3.2 billion, from $2.9 billion in the
prior year. The Company reported net earnings of $160.4 million for the year,
or $1.17 pro forma net earnings per share, up 32% from the $121.2 million for
fiscal 1995.
Leonard A. Lauder, Chairman and Chief Executive Officer, said, "Our record
results reflect further strengthening of our global brand franchises as net
sales increased across all geographic regions and product categories. We are
delighted that this year's double-digit sales increase continues our string of
more than 40 consecutive years of sales growth.
"As for profitability," Mr. Lauder added, "we are pleased that our global
sourcing and manufacturing initiatives combined with efficiencies generated in
our sales and administrative operations have helped add nearly two points to
our operating margin versus last year. Our goal is to continue our strong
momentum in both sales and earnings into fiscal 1997 and beyond."
In the Americas region, the Company reported a 14% increase in net sales,
to $1.8 billion, and a substantial gain in operating profitability versus the
prior year. Gains were attributable to the continued strength of new product
launches, growth from existing products and contributions from the recently
acquired M.A.C. and Bobbi Brown product lines.
In Europe, the Middle East & Africa, the Company achieved net sales of
$856 million, a 9% increase over the prior year. Strong sales growth in South
Africa, Spain, Italy, and the travel retail business more than offset lower
net sales in Germany, reflecting the sluggish retail environment there.
Operating profitability in the region increased significantly over the prior
year, primarily driven by higher operating results in Italy, the Nordic
region, Austria and the travel retail business.
On a local currency basis, Asia/Pacific net sales grew 7% over the prior
year, as a result of sales increases in every market in the region, including
Japan. However, due to the continued strength of the U.S. dollar versus the
yen, reported net sales for the region were up 1% over the prior year, to
$539 million. The Company achieved strong double-digit sales growth in
Taiwan, Korea, and Hong Kong. Reported operating profit in the region
decreased slightly compared with the prior year, due to unfavorable foreign
currency translation and expenditures associated with the launch of Origins in
Japan, partially offset by strong results in Taiwan, Korea, and Hong Kong.
On a product category basis, the strongest growth was generated in the
fragrance category, where sales increased 14% over the prior year to
$776 million. Fragrance sales were driven by the outstanding debut of Estee
Lauder pleasures in fiscal 1996 along with the continued success of "tommy."
In addition, the Company's classic fragrances such as Beautiful and White
Linen continued to generate impressive sales in the category. Makeup product
sales were up 13% in the year, to $1.13 billion, due to the strong growth of
M.A.C. and Bobbi Brown essentials, which are largely makeup lines, as well as
growth of existing products in other brands, such as Estee Lauder's Enlighten
Skin-Enhancing Makeup and Clinique's Soft Finish Makeup. Skin care products
grew 6% over the prior year to $1.29 billion, due to successful new product
launches including Clinique's Moisture On-Call and Estee Lauder's DayWear
Super Anti-Oxidant Complex, as well as growth of existing products such as
Estee Lauder's Advanced Night Repair and Clinique's Dramatically Different
Moisturizing Lotion.
For the fourth quarter ended June 30, 1996, the Company reported net sales
of $736.7 million, up 6% from $698.2 million in the comparable prior year
period. Excluding the impact of foreign currency translation, net sales would
have increased 11% for the quarter. On a local currency basis, net sales
increased across all geographic regions, with double-digit growth in both the
Americas and Europe, the Middle East & Africa regions. Net sales also
increased across all product categories, with particularly strong performance
in fragrances.
Net earnings for the quarter increased to $27.3 million, or $.18 net
earnings per share, up 73% over the $15.8 million reported in the same period
a year ago. Despite a reduction in gross margin principally associated with
shifts in product mix, operating margin substantially improved due to
continued efficiencies in sales and administrative operations.
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, M.A.C., and Bobbi Brown essentials.
THE ESTEE LAUDER COMPANIES INC.
SUMMARY OF CONSOLIDATED RESULTS
(In millions, except per share data)
Three Months Ended Year Ended
June 30, June 30,
1996 1995 1996 1995
Net Sales $736.7 $698.2 $3,194.5 $2,899.1
Cost of sales 163.9 149.4 731.0 674.8
Gross Profit 572.8 548.8 2,463.5 2,224.3
Selling, general and
administrative expenses:
Selling general and
administrative 513.6 504.4 2,116.0 1,957.7
Related party royalties 9.1 7.6 37.2 35.7
522.7 512.0 2,153.2 1,993.4
Operating Income 50.1 36.8 310.3 230.9
Interest income, net 1.0 0.9 2.7 2.1
Earnings before Income Taxes
and Minority Interest 51.1 37.7 313.0 233.0
Provision for income taxes 20.5 20.1 138.3 108.0
Minority interest (3.3) (1.8) (14.3) (3.8)
Net Earnings 27.3 15.8 160.4 121.2
Preferred stock dividends 5.8 1.4 57.5 25.3
Net Earnings Attributable
to Common Stock(A) $21.5 $14.4 $102.9 $95.9
Net earnings per common share $.18 -- n/a --
Weighted average common shares
outstanding 118.3 -- n/a --
Pro Forma Net Earnings
Per Share(A):
Net Earnings n/a -- $160.4 --
Pro forma preferred stock
dividends n/a -- 23.4 --
Pro Forma Net Earnings
Attributable to Common Stock n/a -- $137.0 --
Pro forma net earnings per
common share n/a -- $1.17 --
Pro forma weighted average
common shares outstanding n/a -- 116.8 --
(A) As a result of a recapitalization and the issuance of common stock in
the Company's initial public offering (the "Offering") in November 1995, net
earnings per share for the year ended June 30, 1996, have been computed on a
pro forma basis assuming the recapitalization occurred at the beginning of the
current fiscal year, and includes the amount of shares issued by the Company
in the Offering from the date of issuance plus the effect of common shares
contingently issuable, primarily from stock options from the same date. Pro
forma preferred stock dividends for the current year reflect only recurring
dividends on the Company's $6.50 Cumulative Redeemable Preferred Stock. Due
to the change in the Company's capital structure effected by the
recapitalization, actual shares and per share data for the three months and
year ended June 30, 1995, are not comparable to, or meaningful in, the context
of the current periods. Likewise, due the recapitalization and the Offering,
historical earnings per share data are not included herein, except for
complete periods after the date of the Offering.
SOURCE The Estee Lauder Companies Inc.
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CONTACT:
Investor Relations: Gina R. Boswell,
212-572-4384, or Media Relations: Karen O''Connor, 212-572-4439,
both of The Estee Lauder Companies
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