Estee Lauder Companies Inc.
) posted third quarter 2012 earnings of 38 cents per share,
which climbed 7% year over year. The earnings moved past the Zacks
Consensus Estimate of 33 cents.
Profits during the quarter were aided by focused investments on
product innovations, coupled with strong creative capabilities and
elevated high-touch services.
Net sales for the quarter grew to $2.3 billion from $2.2 billion
in the prior-year quarter. The quarterly sales matched the Zacks
Consensus Revenue Estimate.
Gross margin went up 140 basis points (bps) to 79.1% in the
third quarter of 2012. Operating expense margin declined to 69.7%
in the quarter from 68.1% in the previous year, while operating
income margin contracted marginally by 20 basis points to 9.4%.
Skin Care product sales rose 10% to $1.1 billion, Makeup sales
inched up1.0% to $877.0 million, Fragrance rose 2% to $231.3
million and Hair Care product sales went up 1.0% to $110.1
Sales in the Americas rose 5.0% to $974.3 million; in Europe,
the Middle East & Africa sales surged 6% to $823.6 million,
whereas in the Asia/Pacific region sales remained flat at $450.3
Other Financial Update
Net cash provided by operating activities was $869.7 million,
compared with $727.6 million in the prior-year period. Cash
provided increased on the back of higher net earnings, as well as a
net increase in cash from certain working capital components.
Estee Lauder exited the quarter with cash and cash equivalents
of $1.2 billion and long-term debt of $1.1 billion.
For the fourth quarter of 2012, diluted net earnings per common
share excluding restructuring charges is projected to be 11 cents
to 16 cents. For fiscal 2012, earnings excluding restructuring
charges are projected to be $2.21 to $2.26.
Estee Lauder, which competes with
Procter & Gamble Co.
), holds a Zacks #3 Rank, which translates into a short-term Hold
rating. We maintain a long-term Neutral rating on Estee Lauder.
ESTEE LAUDER (EL): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis
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