Estee Lauder Companies Inc.
) posted third-quarter fiscal 2013 earnings of 45 cents per share
(excluding restructuring charges), which climbed 19.0% from 38
cents in the prior-year quarter. The results were ahead of
management's guidance range of 28 cents to 32 cents. The reported
earnings also exceeded the Zacks Consensus Estimate of 33 cents
Profits during the quarter were aided by solid performance in
the U.S. and the emerging markets.
Quarter in Detail
Net sales, excluding foreign currency translation, climbed 3%
to $2.29 billion. The increase was in the lower end of the
company's guidance of 3%-4%. Sales growth was partly offset by
soft results in Southern Europe and Korea due to the ongoing
macroeconomic headwinds. The quarterly sales however, missed the
Zacks Consensus Estimate of $2.33 billion.
The Hair Care product line was the strongest in the last
quarter, growing 6% from the year-ago quarter. This was followed
by Makeup and then Fragrance, which grew 5% and 1%, respectively.
Skin Care product remained flat compared to prior-year quarter.
Other products, with less than 1% of total revenue, declined
The gross margin expanded 160 basis points (bps) to 80.7% in
the third quarter of fiscal 2013 owing to strong sales and cost
control. Despite higher selling, general & administrative
expenses, operating income margin increased 130 bps to 10.7% due
to much higher restructuring charges.
Sales in the Americas rose 1.0% to $988.1 million. The sales
increased on the back of the growth in the Company's makeup
artist brands and Aveda as well as a favorable year-over-year
comparison due to a sales return in the prior year. On a constant
currency basis, sales increased 2% in the region.
, the Middle East & Africa:
Overall sales in the region went up 3.0% both on a reported and
constant currency basis to $847.9 million on the back of a
double-digit growth in travel retail. Growth would have been
stronger if not for the softness in Switzerland, France, Spain
and the Balkans. However, the company witnessed sales growth in
most of the other markets.
Sales in the region improved 1.0% to $455.8 million, mainly owing
to the increased demand for skin care products in Australia,
Hongkong and Thailand. However, weakness in Korea partially
offset the sales growth. On a constant currency basis, sales
increased 3% in the region.
Other Financial Update
As of Mar 31, 2013, the company held $1.44 billion cash and
cash equivalents compared to $1.32 billion as of Dec 31, 2012.
Long-term debt remained flat at $1.33 billion compared to 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 payable on May 31,
2013 to stockholders of record at the close of business on Feb
For fiscal 2013, earnings per share excluding restructuring
charges are projected in the range of $2.56 to $2.61 compared to
$2.51 to $2.0 as expected previously. Net sales are expected to
increase between 6% in constant currency.
Headquartered in New York, Estee Lauder engages in the
manufacture and sale of skin care, makeup, fragrance and hair
care products and carries a Zacks Rank #3 (Hold).
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) has a Zacks Rank #2 (Buy), and is another stock worth
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