Estee Lauder Companies Inc.
) posted second quarter fiscal 2013 earnings of $1.16 per share
(excluding restructuring charges), which climbed 14.9% from $1.01
in the prior-year quarter. The results were ahead of the
management's guidance range of 97 cents to $1.03. The reported
earnings also exceeded the Zacks Consensus Estimate of $1.04 by
Profits during the quarter were aided by solid performance in
the U.S. and emerging markets.
Quarter in Detail
Net sales, excluding foreign currency translation, climbed 7%
to $2.9 billion. The increase was within the company's guidance
of 6%-7%. The strong sales were driven primarily by the
Asia/Pacific region, followed by the EMEA and Americas. The
quarterly sales were in-line with the Zacks Consensus
The Skin Care product line was the strongest in the last
quarter, growing 10% from the year-ago quarter. This was followed
by Hair Care, Makeup and then fragrance, which grew 9%, 7% and
4%, respectively. Other products, with make up less than 1% of
revenue, declined. Currency was a slight positive for the
The gross margin expanded 70 basis points (bps) to 80.6% in
the second quarter of fiscal 2013 owing to strong sales and cost
control. Despite higher selling, general & administrative
expenses, operating income margin increased 50 bps to 22.3% due
to much higher restructuring charges.
Sales in the Americas rose 6.0% to $1.1 billion. The sales
increased on the heels of successful product innovations,
particularly in the U.S. Almost all the product segments
experienced sales growth except fragrance in the region. Strong
results in the makeup artist brands and certain heritage and hair
care brands also boosted sales during the quarter.
, the Middle East & Africa:
Overall sales in the region went up 6.0% to $1.1 billion. Growth
would have been stronger if not for the softness in Russia, Spain
and Italy. However, the company generated sales growth in most of
the other markets. On a constant currency basis, sales increased
7% in the region.
Sales in the region improved 11.0% to $687.6 million, mainly
owing to increased demand for skin care products in China,
Hongkong and Thailand. However, weakness in Korea partially
offset the sales growth. On a constant currency basis, sales
increased 9% in the region.
Other Financial Update
As of December 31, 2012, the company held $1.32 billion cash
and cash equivalents compared to $999.1 million as of Sep 30,
2012. Long term debt remained at $1.33 billion compared to $1.07
billion at the end of the previous quarter.
The company has announced a dividend of 18 cents per share on
the Company's Class A and Class B Common Stock on payable on
March 15, 2013 to stockholders of record at the close of business
on February 28, 2013.
For the third quarter of fiscal 2013, earnings per share
excluding restructuring charges are projected in the range of 28
cents to 32 cents per share. Net sales are expected to increase
between 3% and 4% in constant currency.
For fiscal 2013, the company reiterated its earnings guidance
(excluding restructuring charges and early debt extinguishment)
to between $2.51 to $2.. Net sales in constant currency are
expected to increase between 6% and 7% as compared to 6% and 8%,
Headquartered in New York, Estee Lauder engages in the
manufacture and sale of skin care, makeup, fragrance, and hair
care products. Other peer companies like
The Female Health Company
Inter Parfums Inc.
) - Zacks Rank #1 (Strong Buy), and
Helen of Troy Limited
) - Zacks Rank #2 (Buy) are currently doing well and are worth
ESTEE LAUDER (EL): Free Stock Analysis Report
FEMALE HEALTH (FHCO): Free Stock Analysis
HELEN OF TROY (HELE): Free Stock Analysis
INTER PARFUMS (IPAR): Free Stock Analysis
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