Estee Lauder's Profit Grows - TheStreet

Estee Lauder's Profit Grows

Strong sales in Europe drove results.
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Cosmetics giant Estee Lauder (EL) - Get Report reported a big jump in third-quarter sales and earnings Wednesday, while boosting fiscal-year profit expectations as European sales grew.

Including certain discontinued operations, the company said earnings rose to $98.3 million, or 42 cents a share, from $77.9 million, or 33 cents a share, a year ago.

On a continuing operations basis, earnings rose to $100.1 million, or 43 cents a share, from $79.1 million, or 34 cents a share, in the prior-year period. On that basis, analysts had been expecting 35 cents a share, on average.

Sales rose 15% to $1.42 billion. Excluding foreign currency exchange impacts, sales increased 10%, the company said. By segment, skin-care product revenue increased 10% to $559.1 million, or an increase of 4% in local currencies. Sales of makeup rose 22% to $591 million, or 17% in local currencies, and fragrance sales increased 12% to $203.4 million, or 5% in local currencies.

"In the United States, the recent strong retail environment generated better-than-expected sales growth, and we are encouraged by indications of an improving economy," the company said in a statement. "Sales were also up in all product categories, paced by strong new product introductions, as well as solid sales of existing products, with makeup particularly strong this quarter."

Looking to full-year 2004, Estee Lauder now expects sales to grow 13%, representing an increase of 9% in local currencies. Earnings from continuing operations are projected to be $1.59 to $1.62 a share.

The Wall Street consensus is for a continuing operations profit of $1.55 a share in the year.

The company expects sales strength to be led by Europe, the Middle East and Africa, and then Asia/Pacific and the Americas. On a product category basis, fragrance is projected to be the strongest, followed by makeup, skin care and hair care.

Shares of Estee Lauder were recently up 41 cents to $44.41 on the

New York Stock Exchange


Company founder Estee Lauder died Saturday in her New York home at 97.