Fourth Quarter Net Earnings Increase 34%; Full Year Net Earnings Up 23%

    NEW YORK, Aug. 12 /PRNewswire/ -- The Estee Lauder Companies Inc.
(NYSE: EL) today reported record net sales for the fiscal year ended June 30,
1997 of $3.4 billion, a 6% increase from $3.2 billion in the prior year.
Excluding the impact of foreign currency translation, net sales increased 9%
during the year.
    For the 1997 fiscal year, the Company reported record net earnings of
$197.6 million, or $1.46 per common share, up 23% from $160.4 million reported
in the same period last year.
    For the fourth quarter ended June 30, 1997, the Company reported record
net sales of $775.9 million, up 5% from $736.7 million in the comparable prior
year period.  Excluding the impact of foreign currency translation, net sales
would have increased 9% during the fourth quarter.  On a local currency basis,
net sales increased across all geographic regions.  Net sales also increased
in all product categories, led by a strong performance in makeup.  Net
earnings for the current quarter rose 34% to $36.7 million from $27.3 million
in the corresponding prior year period.  Earnings per common share for the
fiscal 1997 fourth quarter, rose 44% to $.26 from $.18 reported in the same
period last year.
    Leonard A. Lauder, Chairman and Chief Executive Officer, commented, "We
are thrilled to have achieved another year of record sales and earnings,
reflecting the strong consumer appeal for our products.  The significant sales
performance by all of our brands, as well as the success of our initiatives to
enhance operating margins resulted in an excellent performance for our
Company."
    Mr. Lauder continued, "Behind each of our products are the latest
innovative technologies, the highest degree of quality and the foremost effort
to produce the best products.  Our results reflect these distinguishing
characteristics.  Going forward our goal is to continue to produce solid
growth and increase stockholder value."
    In the Americas region, the Company reported an 8% increase in net sales,
to $1.9 billion, versus the prior year.  Higher sales were achieved from
growth of existing products in our core brands, the extraordinary success of
"tommy," the strength of new product launches across all categories, including
"tommy girl," and solid performances from newer brands, Origins, MAC and Bobbi
Brown essentials in the United States.  Operating income in this region
increased substantially as a result of higher sales and the positive impact of
ongoing operational efficiencies.
    In Europe, the Middle East & Africa, net sales increased 11% over the
prior year excluding the impact of foreign currency rate changes.  Due to the
strengthening of the U.S. dollar against most European currencies, the Company
posted a 6% increase in reported net sales for fiscal 1997 over the prior year
to $909.3 million.  Strong sales growth in the United Kingdom and increased
sales in Italy and in the distributor and travel retail businesses more than
offset lower sales in Germany and France resulting from the adverse impact of
foreign currency translation together with a continuing difficult economic
environment in those countries.  Operating results in the region increased
over the prior year primarily due to improved operating profitability in the
United Kingdom, Italy and the distributor and travel retail businesses.
    On a local currency basis, Asia/Pacific net sales grew 6% over the prior
year driven by sales increases in every market, with most markets achieving
double-digit growth rates.  Net sales in Japan on a local currency basis
increased modestly over the prior year.  Reported net sales in the region
decreased 1% over the prior year to $532.9 million as the continued strength
of the U.S. dollar versus the yen tempered reported sales growth.  Operating
profit in the region decreased primarily due to lower operating income in
Japan reflecting the difficult retail environment, incremental promotional
spending, selective price reductions on certain products and the unfavorable
foreign exchange impact of the yen, which more than offset higher operating
results in Australia and Thailand.
    Sales of makeup products were up 11% during the year to $1.3 billion, due
to the success of new products such as Clinique's City Base Compact
Foundation, Prescriptives' Virtual Skin and Estee Lauder's Futurist Age-
Resisting Makeup, the ongoing strength of existing products and higher sales
from MAC and Bobbi Brown essentials.  Sales in the fragrance category grew 6%
over the prior year to $822.7 million led by strong worldwide sales of "tommy"
and the success of "tommy girl" in the U.S. as well as higher sales of Estee
Lauder pleasures and White Linen Breeze.  Net sales of skin care products for
the current year increased 5% excluding the impact of foreign currency
translation.  Skin care product sales were disproportionately impacted by
currency translation given the concentration of skin care sales in the
Asia/Pacific region.  Reported sales of skin care products increased 1% to
$1.3 billion, due to successful new product launches including Clinique's
Moisture On-Line and Estee Lauder's Fruition Extra.
    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 and Bobbi Brown essentials.
    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         Year Ended
                                June 30                 June 30
                           1997        1996         1997        1996
    Net Sales            $775.9      $736.7     $3,381.6    $3,194.5
    Cost of sales         180.4       163.9        765.1       731.0
    Gross Profit          595.5       572.8      2,616.5     2,463.5
    Selling, general and
     administrative expenses:
    Selling, general and
     administrative       524.4       513.6      2,224.6     2,116.0
    Related party
     royalties               8.1        9.1         32.8        37.2
    Total                  532.5      522.7      2,257.4     2,153.2
    Operating Income        63.0       50.1        359.1       310.3
    Interest income, net     2.6        1.0          3.8         2.7
    Earnings before Income
     Taxes and Minority
     Interest               65.6       51.1        362.9       313.0
    Provision for income
     taxes                  27.5       20.5        152.4       138.3
    Minority interest       (1.4)      (3.3)       (12.9)      (14.3)
    Net Earnings            36.7       27.3        197.6       160.4
    Preferred stock
     dividends               5.8        5.8         23.4        57.5
    Net Earnings Attributable
     to Common Stock (A)   $30.9      $21.5       $174.2      $102.9
    Net earnings per
     common share           $.26       $.18        $1.46         n/a
    Weighted average common
     shares outstanding    119.9      118.3        119.2         n/a
    Pro Forma Net Earnings Per Share (A):
    Net Earnings             n/a        n/a          n/a      $160.4
    Pro forma preferred
     stock dividends         n/a        n/a          n/a        23.4
    Pro forma Net Earnings
     Attributable to Common
     Stock                   n/a        n/a          n/a      $137.0
    Pro forma net earnings
     per common share        n/a        n/a          n/a       $1.17
    Pro forma weighted average
     common shares
     outstanding             n/a       n/a           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
fiscal 1996, 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 that same date.  Pro
forma preferred stock dividends for the year ended June 30, 1996 reflect only
recurring dividends on the Company's $6.50 Cumulative Redeemable Preferred
Stock.

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