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The Estée Lauder Companies Reports Record Fiscal 2013 Fourth Quarter And Full Year Results

(12) real estate rates and availability, which may affect the Company’s ability to increase or maintain the number of retail locations at which the Company sells its products and the costs associated with the Company’s other facilities;

(13) changes in product mix to products which are less profitable;

(14) the Company’s ability to acquire, develop or implement new information and distribution technologies and initiatives on a timely basis and within the Company’s cost estimates and the Company’s ability to maintain continuous operations of such systems and the security of data and other information that may be stored in such systems or other systems or media;

(15) the Company’s ability to capitalize on opportunities for improved efficiency, such as publicly-announced strategies and restructuring and cost-savings initiatives, and to integrate acquired businesses and realize value therefrom;

(16) consequences attributable to local or international conflicts around the world, as well as from any terrorist action, retaliation and the threat of further action or retaliation;

(17) the timing and impact of acquisitions and divestitures, which depend on willing sellers and buyers, respectively, and;

(18) additional factors as described in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended June 30, 2012.

The Company assumes no responsibility to update forward-looking statements made herein or otherwise.

The Estée Lauder Companies Inc. is one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance and hair care products. The Company’s products are sold in over 150 countries and territories under the following brand names: Estée Lauder, Aramis, Clinique, Prescriptives, Lab Series, Origins, M•A•C, Bobbi Brown, Tommy Hilfiger, Kiton, La Mer, Donna Karan, Aveda, Jo Malone, Bumble and bumble , Darphin, Michael Kors, American Beauty, Flirt!, GoodSkin Labs, Grassroots Research Labs, Tom Ford, Coach, Ojon, Smashbox, Ermenegildo Zegna, Aerin Beauty, Osiao and Marni.

An electronic version of this release can be found at the Company’s website, www.elcompanies.com.

 

THE ESTÉE LAUDER COMPANIES INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited; In millions, except per share data and percentages)

 
       

Three Months Ended

June 30

   

Percent Change

    Year Ended June 30    

Percent Change

2013

   

2012

2013

   

2012

 
Net Sales (A) $ 2,407.4 $ 2,251.2 7 % $ 10,181.7 $ 9,713.6 5 %
Cost of Sales (A)   475.6   441.2   2,025.9   1,995.8
Gross Profit   1,931.8   1,810.0 7 %   8,155.8   7,717.8 6 %
 
Gross Margin 80.2 % 80.4 % 80.1 % 79.5 %
 
Operating expenses:
Selling, general and administrative 1,765.2 1,701.4 6,597.0 6,324.8
Restructuring and other charges (A) 3.1 20.4 15.1 59.6
Goodwill impairment (B) 9.6 9.6
Impairment of other intangible assets (C)   8.1   15.0   8.1   21.7
  1,786.0   1,736.8 3 %   6,629.8   6,406.1 3 %

Operating Expense Margin

74.2 % 77.2 % 65.1 % 66.0 %
 
Operating Income 145.8 73.2 99 % 1,526.0 1,311.7 16 %
 
Operating Income Margin 6.0 % 3.2 % 15.0 % 13.5 %
 
Interest expense, net 13.0 14.0 54.8 61.1
Interest expense on debt extinguishment (D) 19.1
Other income (E)       23.1   10.5
Earnings before Income Taxes 132.8 59.2 100 +% 1,475.2 1,261.1 17 %
 
Provision for income taxes   36.9   7.0   451.4   400.6
Net Earnings 95. 9 52.2 84 % 1,023.8 860.5 19 %
 
Net earnings attributable to noncontrolling interests   (1.9 )   (1.0 )   (4.0 )   (3.6 )

Net Earnings Attributable to The Estée Lauder

  Companies Inc.

$ 94.0 $ 51.2

84

% $ 1,019.8 $ 856.9 19 %
 
 

Net earnings attributable to The Estée Lauder Companies

  Inc. per common share:

Basic $ .24 $ .13 83 % $ 2.63 $ 2.20 19 %
Diluted .24 .13 84 % 2.58 2.16 20 %
 
Weighted average common shares outstanding:
Basic 388.2 389.0 387.6 388.7
Diluted 395.5 397.1 394.9 397.0
 

(A) In February 2009, the Company announced the implementation of a multi-faceted cost savings program (the “Program”) to position it to achieve long-term profitable growth. As of December 31, 2012, the Company closed the Program. As a result of the closure of the Program and evaluation of the initiatives that have been implemented as of June 30, 2013, the Company anticipates total cumulative restructuring charges and other costs to implement those initiatives to total between $320 million and $330 million, before taxes and that such charges have been substantially recorded through fiscal 2013. Since the inception of the Program, the Company approved cost savings initiatives to resize the organization, reorganize certain functions, turnaround or exit unprofitable operations and outsource certain services. The impact of returns, charges and adjustments related to the Program for each fiscal period are set forth in tables that follow these notes.

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