This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
The Estée Lauder Companies Inc. (NYSE: EL) today reported a solid financial performance for its first quarter ended September 30, 2012. For the quarter, the Company had net sales of $2.55 billion, a 3% increase compared with $2.48 billion reported in the prior-year quarter. Excluding the impact of foreign currency translation, net sales increased 6% from a year ago. These results were delivered against a 14% local currency sales increase in the prior-year quarter and softer than expected markets, particularly in Western Europe. The Company reported a 150 basis point increase in operating margin and net earnings for the quarter rose 8% to $299.5 million, compared with $278.6 million last year. Diluted net earnings per common share rose 9% to $.76, compared with $.70 reported in the prior year. All mention of net earnings in the body of this release refers to net earnings attributable to The Estée Lauder Companies Inc., which reflects the adjustment for noncontrolling interests.
The fiscal 2013 first-quarter results included charges associated with restructuring activities of $0.4 million. Additionally, in the quarter the Company redeemed $230.1 million principal amount of its 7.75% Senior Notes due 2013. As a result, the Company recorded a pre-tax charge to earnings of $19.1 million ($12.2 million after tax), for the impact of the extinguishment of debt, equal to $.03 per diluted common share. The fiscal 2012 first quarter results included charges associated with restructuring activities of $4.1 million.
Excluding these charges in the first quarters of fiscal 2013 and 2012, net earnings rose 11% to $312.1 million. Diluted net earnings per common share rose 12% to $.79 versus a comparable $.70 in the prior-year period. A reconciliation between GAAP and non-GAAP financial measures is included in this release.
Fabrizio Freda, President and Chief Executive Officer, said, “In this new fiscal year, we continue to be guided by our winning strategy and commitment to profitable growth. Our first quarter results demonstrate the solid fundamentals underlying our business and I am pleased and encouraged with our performance even in softer markets. Organic sales growth for the quarter was in line with our expectations, while earnings per share were better than planned. In particular, strong growth in North America and China drove our sales gains and, when coupled with cost of sales improvements and effective expense management, we generated a significant operating margin increase.