Estee Lauder Companies Inc.
) reached a new 52-week high of $75.02 on Nov 22, following the
release of solid first quarter fiscal 2014 results on Oct 31.
Shares of this cosmetic company eventually closed at $75.01,
reflecting a year-to-date return of 24%.
The company's long-term estimated EPS growth rate is 12.7%.
Average volume of shares traded over the last three months came
in at approximately 1,585K.
First Quarter Results
On Oct 31, Estee Lauder reported its first quarter fiscal 2014
results. Though adjusted earnings of 76 cents per share declined
3.7% from the year-ago quarter, it beat the Zacks Consensus
Estimate by 2.7% and were also ahead of management's guidance
range of 67 cents to 71 cents. We believe global success from
innovations and market share gains in Asia and U.K. helped the
company to deliver better-than-expected results.
Net sales climbed 6% on the back of higher sales across most
geographic regions and major product categories. In the quarter
under review, the Hair Care category was strongest with 10%
growth followed by Fragrance (6%), Skin Care (5%) and Makeup
(4%). Gross margin inflated 80 basis points (bps) to 79.7% in the
first quarter of fiscal 2014 owing to higher sales.
Following better-than-expected results in the first quarter,
Estee Lauder raised the lower end of its earnings guidance for
fiscal 2014 to a range of $2.80 - $2.87, compared to the
previously announced range of $2.74 - $2.87. The company however
maintained its sales growth guidance of 6%-8% increase in
Overall, we are encouraged by Estee Lauder's booming travel
retail business. Rising air traffic is expected to boost sales in
the Travel Retail segment in the upcoming quarters. The company
has also witnessed a rise in online sales, which is impressive.
Moreover, the company's continuous product innovation helps it to
maintain market share amid difficult conditions.
Innovation remains an integral part of the company and helps
it to drive profitable growth. Recently, Estee Lauder rolled out
the Modern Muse fragrance brand in selected countries in
September, which became a bestseller at Harrods in the U.K. and
was among the top 10 women prestige fragrances in the U.S. Other
successful fragrances launched during the quarter include the
Michael Kors Collection, Tory Burch and Zegna Uomo, all of which
were well received.
Estee Lauder holds a Zacks Rank #3 (Hold)
Other Stocks to Consider
Other players in the cosmetic industry worth considering
NU Skin Enterprises Inc.
) with a Zacks Rank #1 (Strong Buy) and
Shiseido Company, Limited
) with a Zacks Rank #2 (Buy).
ESTEE LAUDER (EL): Free Stock Analysis Report
LOREAL CO-ADR (LRLCY): Get Free Report
NU SKIN ENTERP (NUS): Free Stock Analysis
SHISEIDO CO-ADR (SSDOY): Get Free Report
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