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Estee Lauder Posts Glowing Quarterly Earnings and Lifts Forecast

Estée Lauder posts earnings and sales that beat forecasts and raises its outlook as consumers return to brick-and-mortar stores in search of post-pandemic glow-ups.

Estée Lauder  (EL) - Get Estee Lauder Companies Inc. Class A Report on Tuesday reported fiscal first-quarter earnings and sales that beat analysts’ forecasts and raised its fiscal 2022 outlook amid ongoing robust sales of its makeup and skin care products as consumers returned to brick-and-mortar stores in search of glow-ups.

The New York-based company said it earned $692 million, or $1.88 a share, in the three months ended September 30, up from $523 million, or $1.42 a share a year earlier. On an adjusted basis, the company earned $1.89 a share, above the $1.70 a share expected by analysts polled by FactSet.

Revenue came in at $4.39 billion, up from $3.5 billion a year ago and above analysts’ forecasts of $4.3 billion.

Strong international sales, particularly in China and our other emerging markets, as well as within the company’s skin care category, travel retail and online channels and helped propel earnings for the quarter, as did consumers' return to brick-and-mortar stores that sell the company's skin, hair and fragrance products. 

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"We delivered excellent performance to begin fiscal 2022, despite the increased volatility and variability globally during the quarter," CEO Fabrizio Freda said in a statement, adding that relative to the pre-pandemic first quarter of fiscal 2020, the overall business is "...much bigger and more profitable."

Looking ahead, Estée Lauder said now sees net sales increasing between 11% and 13% vs. the prior-year period, with per-share earnings of between $2.47 and $2.59 for its fiscal second quarter. Excluding restructuring and other charges and adjustments, diluted net earnings per common share are projected to be between $2.51 and $2.61.

On an adjusted basis, however, Estée Lauder said it expects per-share earnings to be flat to down 4%, noting that it expects to take charges "...associated with previously approved restructuring and other activities, including its post-COVID Business Acceleration Program, which is expected to result in charges of between approximately $10 million and $20 million, or between 2 cents and 4 cents a share.

Shares of Estee Lauder were down 1.89% at $319 in premarket trading. Year to date the stock is up 27.51%.